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Abstract

Oligopolistic competition is analyzed in a complete information multi-principal common agency framework, where principals are firms supplying differentiated goods and the agent is a representative consumer. We first propose a canonical formulation of common agency games, and a parameterization of the set of equilibria based on the Lagrange multipliers associated with the participation and the incentive compatibility constraints of each principal. This is used to characterize the set of equilibria in the intrinsic and non-intrinsic games. The former includes the latter, as well as the standard price and quantity equilibrium outcomes. It may also include the collusive solution.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 70 (2010)
Issue (Month): 1 (September)
Pages: 21-33

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Handle: RePEc:eee:gamebe:v:70:y:2010:i:1:p:21-33

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Common agency Oligopolistic competition Competitive toughness Tacit collusion;

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References

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1. Claude d'Aspremont & Rodolphe Dos Santos Ferreira & Louis-André Gérard-Varet, 2007. "Competition For Market Share Or For Market Size: Oligopolistic Equilibria With Varying Competitive Toughness," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 761-784, 08.
   
   • d'ASPREMONT, Claude & DOS SANTOS-FERREIRA, Rodolphe & GÉRARD-VARET, Louis-André, 2003. "Competition for market share or for market size: oligopolistic equilibria with varying competitive toughness," CORE Discussion Papers 2003010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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   • David Martimort, 1996. "Exclusive Dealing, Common Agency, and Multiprincipals Incentive Theory," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 1-19, Spring.
   • Martimort, David, 1994. "Exclusive Dealing, Common Agency and Multiprincipals Incentive Theory," IDEI Working Papers 43, Institut d'Économie Industrielle (IDEI), Toulouse, revised 1996.
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   • Martimort, David & Stole, Lars, 1999. "Contractual Externalities and Common Agency Equilibria," IDEI Working Papers 110, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2003.
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11. Peters, Michael, 2001. "Common Agency and the Revelation Principle," Econometrica, Econometric Society, vol. 69(5), pages 1349-72, September.
    
    • Michael Peters, 1999. "Common Agency and the Revelation Principle," Working Papers peters-99-01, University of Toronto, Department of Economics.
12. d'Aspremont, C & Ferreira, R Dos Santos & Gerard-Varet, L-A, 1991. "Pricing Schemes and Cournotian Equilibria," American Economic Review, American Economic Association, vol. 81(3), pages 666-73, June.
13. David Martimort & Lars Stole, 2002. "The Revelation and Delegation Principles in Common Agency Games," Econometrica, Econometric Society, vol. 70(4), pages 1659-1673, July.
    
    • David Martimort & Lars Stole, 2001. "The Revelation and Delegation Principles in Common Agency Games," CESifo Working Paper Series 575, CESifo Group Munich.
14. B. Douglas Bernheim & Michael D. Whinston, 1985. "Common Marketing Agency as a Device for Facilitating Collusion," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 269-281, Summer.
15. Martimort, David & Stole, Lars, 2009. "Market Participation under Delegated and Intrinsic Common Agency Games," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
16. Laussel, Didier & Le Breton, Michel, 2001. "Conflict and Cooperation: The Structure of Equilibrium Payoffs in Common Agency," Journal of Economic Theory, Elsevier, vol. 100(1), pages 93-128, September.
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19. Ehud Kalai & Mark A. Satterthwaite, 1986. "The Kinked Demand Curve," Discussion Papers 677, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
20. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.

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Citations

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Cited by:

1. Ulrich Horst & Santiago Moreno-Bromberg, 2010. "Efficiency and Equilibria in Games of Optimal Derivative Design," SFB 649 Discussion Papers SFB649DP2010-035, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
   
   • Ulrich Horst & Santiago Moreno-Bromberg, 2011. "Efficiency and Equilibria in Games of Optimal Derivative Design," Papers 1107.0839, arXiv.org.
2. Han, Seungjin, 2012. "On take it or leave it offers in common agency," Economics Letters, Elsevier, vol. 117(3), pages 777-781.
   
   • Seungjin Han, 2010. "On Take It or Leave It Offers in Common Agency," Department of Economics Working Papers 2010-04, McMaster University, revised Jun 2012.
   • Han, Seungjin, 2011. "On Take It or Leave It Offers in Common Agency," Micro Theory Working Papers seungjin_han-2011-11, Microeconomics.ca Website, revised 18 Jun 2012.
3. Andrea Attar & Eloisa Campioni & Gwenael Piaser, 2011. "Information Revelation in Competing Mechanism Games," CEIS Research Paper 205, Tor Vergata University, CEIS, revised 04 Jul 2011.
4. Saul DESIDERIO & Davide DOTTORI, 2007. "A note on competitive toughness: why it should be identified neither with product substitutability, nor (inversely) with concentration. Toward a unified theory of oligopoly," Working Papers 301, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

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