NBER Working Papers by Robin S. Lee

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Working Papers

October 2014Bargaining in Bilateral Oligopoly: An Alternating Offers Representation of the "Nash-in-Nash" Solution
with Allan Collard-Wexler, Gautam Gowrisankaran: w20641
The concept of a Nash equilibrium in Nash bargains, proposed in Horn and Wolinsky (1988), has become the workhorse bargaining model for predicting and estimating the division of surplus in applied analysis of bilateral oligopoly. This paper proposes a non-cooperative foundation for this concept—in which agreements between each pair of firms maximizes their bilateral Nash product conditional on all other negotiated agreements—by extending the Rubinstein (1982) alternating offers model to a setting with multiple upstream and downstream firms. In our model, downstream firms make simultaneous offers to upstream firms in odd periods, and upstream firms make simultaneous offers to downstream firms in even periods. Given restrictions on underlying payoffs, we prove that there exists a perfect Bay...
September 2013Insurer Competition and Negotiated Hospital Prices
with Kate Ho: w19401
We measure the impact of increased health insurer competition on negotiated hospital prices using detailed 2004 California claims data. We develop a theoretical bargaining model to moti--vate our empirical analysis, and use the competitiveness of Kaiser Permanente, a large vertically integrated insurer, in a hospital's market as a measure of insurer competition. We find that in--creasing competition reduces hospital prices on average, but that the most attractive hospitals can leverage increased competition to negotiate higher rates. This bargaining effect creates in--centives for further hospital consolidation and implies that hospital market power can impact prices even in markets with many insurers.
April 2009Interviewing in Two-Sided Matching Markets
with Michael Schwarz: w14922
We introduce the interview assignment problem, which generalizes the one-to-one matching model of Gale and Shapley (1962) by introducing a stage of costly information acquisition. Agents may learn preferences over partners via costly interviews. Although there exist multiple equilibria where all agents receive the same number of interviews, efficiency depends on overlap -- the number of common interview partners among agents. We prove the equilibria with the highest degree of overlap yields the highest probability of being matched. The analysis suggests that institutions which ration interviews or create labor market segmentation may lead to greater efficiency in information acquisition activities.

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