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Competition For Market Share Or For Market Size: Oligopolistic Equilibria With Varying Competitive Toughness

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  • Claude d'Aspremont
  • Rodolphe Dos Santos Ferreira
  • Louis-André Gérard-Varet

Abstract

For an industry producing a composite commodity, we propose a comprehensive concept of oligopolistic equilibrium, allowing for a parameterized continuum of regimes varying in competitive toughness. Each firm sets simultaneously its price and its quantity under two constraints, relative to its market share and to market size. The price and the quantity equilibrium outcomes always belong to the set of oligopolistic equilibria. When firms are identical and we let their number increase, any sequence of symmetric oligopolistic equilibria converges to the monopolistic competition outcome. Further results are derived in the symmetric CES case, concerning in particular the collusive solution enforceability. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 48 (2007)
Issue (Month): 3 (08)
Pages: 761-784

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Handle: RePEc:ier:iecrev:v:48:y:2007:i:3:p:761-784

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Citations

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Cited by:
  1. Claude, D’ASPREMONT & Rodolphe, DOS SANTOS FERREIRA, 2005. "Oligopolistic Competition as a Common Agency Game," Discussion Papers (ECON - Département des Sciences Economiques) 2005018, Université catholique de Louvain, Département des Sciences Economiques.
  2. Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2011. "The empirical content of Cournot competition," Center for Economic Studies - Discussion papers ces11.11, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  3. Rodolphe Dos Santos Ferreira & Frédéric Dufourt, 2007. "Free entry equilibria with positive profits: A unified approach to quantity and price competition games," International Journal of Economic Theory, The International Society for Economic Theory, vol. 3(2), pages 75-94.
  4. d’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe & GERARD-VARET, Louis-André, . "Strategic R&D investment, competitive toughness and growth," CORE Discussion Papers RP -2240, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Claude d’Aspremont & Rodolphe Dos Santos Ferreira & Jacques Thépot, 2007. "Hawks and doves in segmented markets : A formal approach to competitive aggressiveness," Working Papers of LaRGE Research Center 2007-04, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
  6. d’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2009. "Household behavior and individual autonomy," CORE Discussion Papers 2009022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. d’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2004. "Price-quantity competition with varying toughness," CORE Discussion Papers 2004088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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