Econ Seminar: Matteo Bizzarri (University of Napoli Federico II)

Matteo Bizzarri from University of Napoli Federico II will present his paper entitled " Supply and demand function competition in input-output networks  ” on Wednesday, 29th of March at 11.45.  The seminar will be physical at FASS 2054 but it can also be watched  at the following link https://sabanciuniv.zoom.us/j/91383976765 

Supply and demand function competition in input-output networks

This paper presents a model of non-infinitesimal firm-to-firm trade via competition in supply and demand functions relating quantities to prices.

The main features of the model are two: first, firms have endogenous market power in both input and output markets; second, firms internalize their position in the supply chain.

The former is important to rank market power across firms: in models in which firms are restricted to affect only output or only input prices the ranking of market power can be reversed. The latter is important for the assessment of aggregate distortions: final prices and distortions are higher than in a model where firms do not take their position in the supply chain into account.

An equilibrium exists for general non-parametric technology, provided the best replies are convex-valued, under suitable regularity and boundedness assumptions. Under a suitable parametric functional form, the equilibrium is in linear schedules.