Three Essays on Price Competition in Oligopoly

Three Essays on Price Competition in Oligopoly

Author: Shyh-Fang Ueng

Publisher:

Published: 1992

Total Pages: 118

ISBN-13:

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This research investigates three issues related to the economic performance of oligopolistic markets where firms produce differentiated products and compete in prices. First of all, this dissertation uses a Markov Perfect Equilibrium approach with fixed periods of commitment of actions to answer the question of what prices a duopolists will charge in equilibrium if they produce horizontally differentiated products, move alternatingly, and compete in prices forever. It is found that firms charge prices which are higher than Nash equilibrium prices but lower than the fully collusive equilibrium prices. Also, contrasted with the Nash equilibrium of the one-shot constituent game, the firm having the significantly higher demand responsiveness to its own price always charges a lower price than the other firm does although it has higher marginal cost. The dissertation then proceeds to study whether a firm can overcome its cost disadvantage by upgrading its product over the rival's, and if so, whether there exists a profit-division which will induce the low cost firm and the high cost firm to collude and no one has an incentive to cheat. The results show that (1) the ability of upgrading the product over the rival's can allow a high cost firm to earn higher profit than a cost advantaged low cost firm; (2) there exists at least one profit-division which can sustain full collusion; and (3) in the collusive equilibrium firms enlarge their quality differences to alleviate the price tension between their products. Finally, this work investigates the welfare effect of mergers which occur in an oligopolistic industry where firms produce differentiated products. It is shown that for the merger to be socially beneficial, the number of the merging firms must be less than the total number of firms in the industry minus the ratio of the products' own elasticity to cross elasticity. The analysis indicates that the welfare effect of a merger of a specific size depends on the substitutability among products of the industry.


The Antitrust Paradox

The Antitrust Paradox

Author: Robert Bork

Publisher:

Published: 2021-02-22

Total Pages: 536

ISBN-13: 9781736089712

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The most important book on antitrust ever written. It shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses.


Firms` Strategic Decisions Theoretical and Empirical Findings

Firms` Strategic Decisions Theoretical and Empirical Findings

Author: Kazuhiro Ohnishi

Publisher: Bentham Science Publishers

Published: 2015-04-06

Total Pages: 263

ISBN-13: 1681080389

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This eBook presents recent case studies on firms and their strategy employed in specific scenarios and industries. Readers will find, in this volume, an analysis of oligopolistic industries done by using various economic models. These models attempt to explain changes to the competitive environment owing to strategic firm behavior, that is, on the assumption that firms are able to compete effectively and advantageously against rivals through applying strategic initiatives. This eBook investigates the behavior of profit-maximizing firms as well as labor-managed, state-owned and joint-stock firms. Fifteen chapters present empirical or theoretical findings, and develop the economic analysis of firm behavior.


The Selected Essays of John H. Dunning

The Selected Essays of John H. Dunning

Author: John H. Dunning

Publisher: Edward Elgar Publishing

Published: 2002-01-01

Total Pages: 546

ISBN-13: 9781843767053

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These volumes should be required reading for anyone with an interest in international business and globalisation. They add immeasurably to our understanding. Mira Wilkins, Business History Dunning is one of the most prominent researchers and thinkers in the IB field. In these books, he has set out his most celebrated writings and has provided us relatively easy access to widely scattered references in the literature. Rajat Kathuria, Global Business Review The modern academic study of the multinational enterprise started with John Dunning s pioneering study of American Investment in British Manufacturing Industry in 1958. In the early 1970s he began to publish an influential and authoritative stream of papers integrating theoretical and empirical analysis of the multinational enterprise. This fascinating volume charts the evolution of John Dunning s thinking, highlighting his attempts to develop a richer, more dynamic and historical framework for the analysis of the multinational enterprise. It makes compelling reading, and offers unique insights into the intellectual development of his well-known eclectic paradigm of international production. Mark Casson, University of Reading, UK This volume contains a selection of John Dunning s best known and highly acclaimed writings on the theory of international business activity. Spanning more than three decades, the 16 contributions trace the evolution of his thoughts and ideas as an economist, from his first article on the determinants of international production, published in 1973, to his most recent essay on relational assets, networks and global business activity, completed in 2002. Theories and Paradigms of International Business Activity gives particular prominence to the author s much renowned eclectic paradigm, which he first promulgated at a Nobel Symposium on the international allocation of economic activity in 1976. Since then, the author has written over 60 articles, pamphlets and chapters in books which have extended, refined and updated his theorizing on the interface between trade, FDI and MNE activity, in the light of the changing characteristics of the world economy and advances in international business scholarship. This, the first of two volumes of John Dunning s work, is essential reading for all students, scholars and researchers with a special interest in the reasons behind the explosive growth in post-war FDI and the globalization of business activity.


What is the Impact of Increased Business Competition?

What is the Impact of Increased Business Competition?

Author: Sónia Félix

Publisher: International Monetary Fund

Published: 2019-12-13

Total Pages: 57

ISBN-13: 1513521519

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This paper studies the macroeconomic effect and underlying firm-level transmission channels of a reduction in business entry costs. We provide novel evidence on the response of firms' entry, exit, and employment decisions. To do so, we use as a natural experiment a reform in Portugal that reduced entry time and costs. Using the staggered implementation of the policy across the Portuguese municipalities, we find that the reform increased local entry and employment by, respectively, 25% and 4.8% per year in its first four years of implementation. Moreover, around 60% of the increase in employment came from incumbent firms expanding their size, with most of the rise occurring among the most productive firms. Standard models of firm dynamics, which assume a constant elasticity of substitution, are inconsistent with the expansionary and heterogeneous response across incumbent firms. We show that in a model with heterogeneous firms and variable markups the most productive firms face a lower demand elasticity and expand their employment in response to increased entry.


Microeconomics: Undergraduate Essays and Revision Notes

Microeconomics: Undergraduate Essays and Revision Notes

Author: Bahrum Lamehdasht

Publisher: Lulu.com

Published: 2012-12-13

Total Pages: 149

ISBN-13: 1291879471

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This book contains essays and revision notes for Microeconomics at the undergraduate level. This book includes the following topics: - Utility Curves; - Perfect Competition vs. Monopoly; - Oligopoly; - Collusion; - Monopolistic Competition; - Price Discrimination; - X-Efficiency; - Why do Firms Exist?; - Negative Externalities; - Positive Externalities; - Public Goods; - Adverse Selection; - General Equilibrium; - Efficiency Wages; - Minimum Wages and Unemployment; - Arrow-Pratt Risk-Aversion


Equilibrium Theory for Cournot Oligopolies and Related Games

Equilibrium Theory for Cournot Oligopolies and Related Games

Author: Pierre von Mouche

Publisher: Springer

Published: 2016-04-22

Total Pages: 298

ISBN-13: 3319292544

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This state-of-the-art collection of papers on the theory of Cournotian competition focuses on two main subjects: oligopolistic Cournot competition and contests. The contributors present various applications of the Cournotian Equilibrium Theory, addressing topics such as equilibrium existence and uniqueness, equilibrium structure, dynamic processes, coalitional behavior and welfare. Special emphasis is placed on the aggregative nature of the games that are relevant to such theory. This contributed volume was written to celebrate the 80th birthday of Prof. Koji Okuguchi, a pioneer in oligopoly theory.


Oligopolies. A Definition of Oligopolistic Markets

Oligopolies. A Definition of Oligopolistic Markets

Author: Andreas Wellmann

Publisher: GRIN Verlag

Published: 2004-02-22

Total Pages: 17

ISBN-13: 3638255948

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Essay from the year 2004 in the subject Economics - Micro-economics, grade: 72%, University of Bradford (-), course: Micro-Economics, language: English, abstract: The phrase oligopoly is derived from the Greek language and means “few sellers”. Sloman & Sutcliffe (2001) defines an oligopoly as a type of imperfect market in which a ‘few firms between them share a large proportion of the industry.’ (p.236). Thus, industries like oligopolies are dominated by a small number of manufacturers that may produce either differentiated or nearly identical products. It is necessary to distinguish between two types of oligopoly structures. Therefore Harrison, Smith & Davies (1992) suggests the distinction between perfect oligopoly and imperfect oligopoly. Perfect oligopolies feature market players that produce nearly identical products such as sugar or CD’s whereas imperfect oligopolies distinguish themselves by differentiated products like cars or airplanes. [...]