This study looks at how companies in a duopoly that rely on specific suppliers for their products can be affected by the prices and profits of those inputs. By combining a bargaining model with a duopoly model, the researchers found that the structure of the industries involved, the demand for the final products, and how negotiations between suppliers and firms are conducted can all impact the incentives for companies to merge. The findings show that when input prices are determined through bargaining, the reasons for merging can be very different compared to when prices are set without negotiation.