Strong time-consistency in the cartel-versus-fringe model
AbstractIn the seventies and eighties, the theory of exhaustible natural resources developed a branch, which was called the cartel-versus-fringe model, to characterize markets with one large coherent cartel and a big number of small suppliers named the fringe.It was considered appropriate to use the von Stackelberg solution concept but because solutions could only be derived in an open-loop framework time-inconsistency resulted.This paper solves time-inconsistency in the cartel-versus-fringe model and provides the feedback von Stackelberg equilibrium for all cost configurations.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 28 (2003)
Issue (Month): 2 (November)
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Other versions of this item:
- Groot, F. & Withagen, C.A.A.M. & Zeeuw, A.J. de, 2003. "Strong time-consistency in the cartel-versus-fringe model," Open Access publications from Tilburg University urn:nbn:nl:ui:12-117032, Tilburg University.
- Groot, A.M. & Withagen, C.A.A.M. & Zeeuw, A.J. de, 1996. "Strong Time-Consistency in the Cartel-versus-Fringe Model," Discussion Paper 1996-22, Tilburg University, Center for Economic Research.
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