This paper analyzes the problem of altering the cost structure within an oligopoly, in the presence of costs of manipulation. Oligopolistic firms (which differ from each other in production costs) compete a la Cournot in the second stage, taking as given firm-specific taxes or input prices. In the first stage, a government, or a regulatory agency, or a mnopolistic input supplier, sets firm-specific taxes, charges, or input prices, to manipulate the cost structure of its agents, in order to maximize some objective function.
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Length: 34 pages Date of creation: 1997 Date of revision: Handle: RePEc:fth:inecpu:173
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Find related papers by JEL classification: L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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