Two is not too many for monopoly (Q698218)

In this research work the authors introduced the buyout option as a device enabling the monopolization of output, having in view that buyout behaviour has been documented to exist in industries as different as transportation services, utilities the diamond industry and even trade at the retail levels. It is shown that the more efficient firm becomes the price leader, the buyout option permits the follower to implement an outcome which is equivalent to the monopoly outcome from the perspective of a consumer and one determines the roles of leader and follower, the collusive motive for price leadership also crowds out the scope for dominant firm price leadership. The paper is completed with some perspective on further research and pertinent references.