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Imperfect Competition à la Negishi also with Fixed Costs

Author

Listed:
  • Pïerre DEHEZ

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Jacques H. DREZE

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

  • Takashi SUZUKI

    (Meiji-Gakuin University - Tokyo - JAPAN)

Abstract

The paper studies equilibria for economies with imperfect competition and non-convex technologies. Following Negishi, firms maximise profits under downward-sloping perceived demand functions. Negishi’s assumptions, in particular the assumption of a single monopolistic competitor in each market, are relaxed. Existence of equilibria is obtained, under otherwise standard assumptions, for productions sets defined in each firm by the union of a convex technology and a technology subject to fixed costs. In the light of a counterexample, it is assumed that fixed factors are distinct from variable factors. Technically, the proof rests on pricing rules.

Suggested Citation

  • Pïerre DEHEZ & Jacques H. DREZE & Takashi SUZUKI, 2002. "Imperfect Competition à la Negishi also with Fixed Costs," LIDAM Discussion Papers IRES 2002044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2002044
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2002-44.pdf
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    References listed on IDEAS

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    Cited by:

    1. Weinrich, Gerd, 2007. "New Keynesian monopolistic competition and objective demand," Journal of Mathematical Economics, Elsevier, vol. 43(2), pages 153-173, February.
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    3. Xi Chen & Bertrand M. Koebel, 2017. "Fixed Cost, Variable Cost, Markups and Returns to Scale," Annals of Economics and Statistics, GENES, issue 127, pages 61-94.
    4. Jacques H. Drèze & P. Jean‐Jacques Herings, 2008. "Kinky perceived demand curves and Keynes–Negishi equilibria," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(2), pages 207-246, June.

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    More about this item

    Keywords

    Imperfect competition; fixed cost; general equilibrium; perceived demand; pricing rules;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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