Bargaining in markets with simultaneous and sequential suppliers

This paper compares two regimes in a market where suppliers 'wait at stand' for customers to arrive. In the first regime suppliers simultaneously offer their good for sale. Customers randomly select a supplier. In the second regime suppliers queue and sequentially offer their good for sale. Customers must select the supplier ranking in front of the queue. Prices are the result of bilateral negotiation and both parties face switching costs when agreement is not reached. The Nash bargaining solution is used to determine the outcome of the negotiation. The second regime yields a higher negotiated outcome to the supplier. When customers cannot choose regime, the market equilibrium always has the property that there are suppliers in both regimes. (C) 2002 Elsevier Science B.V. All rights reserved.