Dickson, Alex and Hartley, Roger (2013) Bilateral oligopoly and quantity competition. Economic Theory, 52 (3). pp. 979-1004. ISSN 0938-2259Full text not available in this repository. (Request a copy from the Strathclyde author)
Bilateral oligopoly is a market game with two commodities, allowing strategic behavior on both sides of the market. When the number of buyers is large, bilateral oligopoly approximates a game of quantity competition played by sellers. We present examples which show that this is not typically a Cournot game. Rather, we introduce an alternative game of quantity competition (the market share game) and, appealing to results in the literature on contests, show that this yields the same equilibria as the many-buyer limit of bilateral oligopoly, under standard assumptions on costs and preferences. \ We also show that the market share and Cournot games have the same equilibria if and only if the price elasticity of the latter is one, and investigate the differences in equilibria otherwise. These results lead to necessary and sufficient conditions for the Cournot game to be a good approximation to bilateral oligopoly with many buyers and to an ordering of total output when they are not satisfied.
|Keywords:||game theory, economics, social behaviour, quantity competition, cournot, Economic Theory, Economics and Econometrics|
|Subjects:||Social Sciences > Economic Theory|
|Department:||Strathclyde Business School > Economics|
|Depositing user:||Pure Administrator|
|Date Deposited:||18 Nov 2011 05:22|
|Last modified:||03 Jun 2016 03:58|