Competition and Regulation Via Supply and Demand Functions in Oligopolistic-Oligopsonistic Markets
AbstractIn this study, we regard the oligopolistic-oligopsonistic markets within the framework of a â€œdouble auctionâ€ in which both buyers and sellers make bids. To this end, we introduce games where declarations of supply and demand functions (which need not be true) are treated as strategic variables of producers and consumers, respectively, rather than just as â€œbinding commitmentsâ€ on the part of these parties. Existence of symmetric equilibria of each of these games is established. Most of them are shown to be unique. The equilibrium outcomes of these are compared with the standard Cournot outcome as well as among themselves regarding the market price, total quantity produced, individual consumerâ€™s surplus, individual firmsâ€™ profit and social welfare they lead to. To allow the consumers to behave strategically along with the producers, naturally makes the former better off and the latter worse off, while the net effect of this on total social welfare turns out to be case-contingent.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12930.
Date of creation: 26 Apr 2008
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More information through EDIRC
buyer power; demand function equilibria; double auction; oligopoly; oligopsony; supply function equilibria.;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-COM-2008-04-29 (Industrial Competition)
- NEP-MIC-2008-04-29 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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