Implications of Nash bargaining for horizontal industry integration

Richard E. Just, Siddhartha Mitra, Sinaia Netanyahu

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


This article shows how horizontal industry integration can arise from transferable asymmetry of technologies and endowments. The Nash bargaining solution suggests that greater technological diversity among coordinating parties yields greater gains from horizontal integration. The framework fits the case where a firm with a superior technology franchises the technology by horizontal integration. The results appear to fit hog production where integration has been primarily horizontal and, in part, broiler production where integration has been both vertical and horizontal. Specifically, technology has been shared through uniform genetic traits, fine-tuned feed rations, and veterinary services specified in grower contracts.

Original languageEnglish
Pages (from-to)467-481
Number of pages15
JournalAmerican Journal of Agricultural Economics
Issue number2
StatePublished - 1 May 2005


  • Broilers
  • Hogs
  • Horizontal integration
  • Nash bargaining
  • Technological asymmetry

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics


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