Oligopolistic equilibrium and financial constraints
AbstractIn this paper we present a model of oligopoly and financial constraints. We study allocations which are bankruptcy-free (BF) in the sense that no firm can drive another firm to bankruptcy without becoming bankrupt. We show how such allocations can be sustained as an equilibrium of a dynamic game. When there are two firms, all equilibria yield BF allocations. When there are more than two firms, allocations other than BF can be sustained as equilibria but in some cases the set of BF allocations still useful in explaining the shape of equilibrium set.
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Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we1110.
Date of creation: Apr 2011
Date of revision:
Other versions of this item:
- Carmen Beviá & Luis C. Corchón & Yosuke Yasuda, 2011. "Oligopolistic Equilibrium and Financial Constraints," Working Papers 547, Barcelona Graduate School of Economics.
- D2 - Microeconomics - - Production and Organizations
- D4 - Microeconomics - - Market Structure and Pricing
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-30 (All new papers)
- NEP-BEC-2011-04-30 (Business Economics)
- NEP-COM-2011-04-30 (Industrial Competition)
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- Etienne Billette de Villemeur & Laurent Flochel & Bruno Versaevel, 2013.
"Optimal collusion with limited liability,"
International Journal of Economic Theory,
The International Society for Economic Theory, vol. 9(3), pages 203-227, 09.
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