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Infinite horizon oligopoly with asynchronous moves: Cournot-Bertrand reversal

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  • Dan Sasaki

Abstract

In an infinite-horizon oligopoly game, if moves are not synchronised across firms, sustainability of tacitly collusive equilibria becomes substantially distinct from that in a classical simultaneous-move supergame. In linear duopoly, the critical discount factor becomes higher in Bertrand than in Cournot, yet for a low discount factor with which collusion is unsustainable the equilibrium discounted streams of non-collusive profits are higher in a Bertrand game than in a Cournot game. These features are contrary to the well-known observation in synchronous-move supergames, reflecting the tendency that once a deviation path is initiated, then an asynchronous-move Cournot game converges to a competitive outcome more quickly than an asynchronous-move Bertrand game.

Suggested Citation

  • Dan Sasaki, 2016. "Infinite horizon oligopoly with asynchronous moves: Cournot-Bertrand reversal," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 327-341, July.
    • Handle: RePEc:taf:raaexx:v:23:y:2016:i:3:p:327-341
    DOI: 10.1080/16081625.2016.1188753
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    References listed on IDEAS

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    1. Kuang-Cheng Andy Wang & Yi-Jie Wang & Wen-Jung Liang, 2016. "Intellectual property rights, international licensing and foreign direct investment," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 291-305, July.
    2. Ray-Yun Chang & Hong Hwang & Cheng-Hau Peng, 2016. "Discriminatory vs. uniform tariffs with international technology licensing," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 268-277, July.
    3. Chih-Wei Chang & Yan-Shu Lin & Ming-Fang Tsai, 2016. "Technology licensing with asymmetric absorptive capacity," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 278-290, July.
    4. Chia-Chi Wang & Jiunn-Rong Chiou, 2016. "Taxation on a mixed oligopoly in the presence of foreign ownership," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(3), pages 342-355, July.
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