IDEAS home Printed from https://ideas.repec.org/p/kgu/wpaper/51.html
   My bibliography  Save this paper

Losses from competition in a dynamic game model of a renewable resource oligopoly

Author

Listed:
  • Kenji Fujiwara

    (Kwansei Gakuin University)

Abstract

This paper develops a dynamic game model of an asymmetric oligopoly with a renewable resource to reconsider welfare effects of increases in the number of firms. We show that increasing not only the number of inefficient firms but also that of Efficient firms reduces welfare, which sharply contrasts to a static outcome. It is discussed that the closed-loop property of feedback strategies plays a decisive role in this finding.

Suggested Citation

  • Kenji Fujiwara, 2010. "Losses from competition in a dynamic game model of a renewable resource oligopoly," Discussion Paper Series 51, School of Economics, Kwansei Gakuin University, revised Apr 2010.
    • Handle: RePEc:kgu:wpaper:51
    as

    Download full text from publisher

    File URL: http://192.218.163.163/RePEc/pdf/kgdp51.pdf
    File Function: First version, 2010
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tsutsui, Shunichi & Mino, Kazuo, 1990. "Nonlinear strategies in dynamic duopolistic competition with sticky prices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 136-161, October.
    2. Erwin Bulte & Henk Folmer & Wim Heijman, 1995. "Open access, common property and scarcity rent in fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(4), pages 309-320, December.
    3. Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-1231, December.
    4. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
    5. Shimomura, Koji, 1991. "The feedback equilibria of a differential game of capitalism," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 317-338, April.
    6. Hassan Benchekroun & Ngo Van Long, 2006. "The Curse Of Windfall Gains In A Non Renewable Resource Oligopoly," Australian Economic Papers, Wiley Blackwell, vol. 45(2), pages 99-105, June.
    7. Itaya, Jun-ichi & Shimomura, Koji, 2001. "A dynamic conjectural variations model in the private provision of public goods: a differential game approach," Journal of Public Economics, Elsevier, vol. 81(1), pages 153-172, July.
    8. Lahiri, Sajal & Ono, Yoshiyasu, 1988. "Helping Minor Firms Reduces Welfare," Economic Journal, Royal Economic Society, vol. 98(393), pages 1199-1202, December.
    9. Long, Ngo Van & Wang, Shengzu, 2009. "Resource-grabbing by status-conscious agents," Journal of Development Economics, Elsevier, vol. 89(1), pages 39-50, May.
    10. Benchekroun, Hassan, 2008. "Comparative dynamics in a productive asset oligopoly," Journal of Economic Theory, Elsevier, vol. 138(1), pages 237-261, January.
    11. Benchekroun, Hassan & Van Long, Ngo, 2002. "Transboundary Fishery: A Differential Game Model," Economica, London School of Economics and Political Science, vol. 69(274), pages 207-221, May.
    12. James A. Brander & M. Scott Taylor, 1997. "International Trade and Open-Access Renewable Resources: The Small Open Economy Case," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 526-552, August.
    13. Rubio, Santiago J. & Casino, Begona, 2002. "A note on cooperative versus non-cooperative strategies in international pollution control," Resource and Energy Economics, Elsevier, vol. 24(3), pages 251-261, June.
    14. Fershtman, Chaim & Kamien, Morton I, 1987. "Dynamic Duopolistic Competition with Sticky Prices," Econometrica, Econometric Society, vol. 55(5), pages 1151-1164, September.
    15. Benchekroun, Hassan, 2003. "Unilateral production restrictions in a dynamic duopoly," Journal of Economic Theory, Elsevier, vol. 111(2), pages 214-239, August.
    16. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lambertini, Luca & Mantovani, Andrea, 2014. "Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption, voracity and exhaustion," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 115-122.
    2. Benchekroun, Hassan & Ray Chaudhuri, Amrita & Tasneem, Dina, 2020. "On the impact of trade in a common property renewable resource oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    3. Benchekroun, Hassan & Long, Ngo Van, 2016. "Status concern and the exploitation of common pool renewable resources," Ecological Economics, Elsevier, vol. 125(C), pages 70-82.
    4. Michele Bisceglia, 2020. "Optimal taxation in a common resource oligopoly game," Journal of Economics, Springer, vol. 129(1), pages 1-31, January.
    5. Ben Jebli, Mehdi & Ben Youssef, Slim, 2014. "Timing of adoption of clean technologies, transboundary pollution and international trade," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-31.
    6. Wei-Bin Zhang, 2015. "Oscillations in a Growth Model with Endogenous Wealth, Resource, Housing, and Elastic Labour Supply," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(9), pages 458-472, September.
    7. Zhang Wei-Bin, 2011. "Economic Growth And Dynamics Of Renewable Resource With Housing, Agricultural And Resource Land Use," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 6(2), pages 151-174, August.
    8. Jinji, Naoto, 2014. "Comparative statics for oligopoly: A generalized result," Economics Letters, Elsevier, vol. 124(1), pages 79-82.
    9. Slim Ben Youssef, 2015. "Timing of Adoption of Clean Technologies by Regulated Monopolies," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(1), pages 77-92, March.
    10. Luca Lambertini, 2016. "Managerial Delegation in a Dynamic Renewable Resource Oligopoly," Dynamic Modeling and Econometrics in Economics and Finance, in: Herbert Dawid & Karl F. Doerner & Gustav Feichtinger & Peter M. Kort & Andrea Seidl (ed.), Dynamic Perspectives on Managerial Decision Making, pages 93-107, Springer.
    11. Luca Grilli & Michele Bisceglia, 2017. "A Duopoly with Common Renewable Resource and Incentives," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 19(04), pages 1-20, December.
    12. ZHANG Wei-Bin, 2015. "Values Of Land And Renewable Resources In A Three-Sector Economic Growth Model," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(1), pages 156-186, April.
    13. Benchekroun, Hassan & Gaudet, Gérard, 2015. "On the effects of mergers on equilibrium outcomes in a common property renewable asset oligopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 209-223.
    14. Luca Grilli & Michele Bisceglia, 2017. "A differential game in a duopoly with instantaneous incentives," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 40(1), pages 317-333, November.
    15. Wei-Bin Zhang, 2017. "Growth with Endogenous Capital, Knowledge, and Renewable Resources," Romanian Statistical Review, Romanian Statistical Review, vol. 65(1), pages 19-37, March.
    16. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    17. Wei-Bin ZHANG, 2014. "Human Capital, Wealth, and Renewable Resources," Expert Journal of Economics, Sprint Investify, vol. 2(1), pages 1-20.
    18. Luca Grilli & Michele Bisceglia, 2020. "A dynamic private property resource game with asymmetric firms," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 43(1), pages 109-127, June.
    19. Lambertini, Luca & Mantovani, Andrea, 2014. "Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption, voracity and exhaustion," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 115-122.
    20. N. Baris Vardar & Georges Zaccour, 2020. "Exploitation of a Productive Asset in the Presence of Strategic Behavior and Pollution Externalities," Mathematics, MDPI, vol. 8(10), pages 1-28, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fujiwara, Kenji, 2008. "Duopoly can be more anti-competitive than monopoly," Economics Letters, Elsevier, vol. 101(3), pages 217-219, December.
    2. Lambertini, Luca & Mantovani, Andrea, 2014. "Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption, voracity and exhaustion," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 115-122.
    3. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    4. Lambertini, Luca, 2021. "Regulating the tragedy of commons: Nonlinear feedback solutions of a differential game with a dual interpretation," Energy Economics, Elsevier, vol. 100(C).
    5. Lambertini, Luca & Mantovani, Andrea, 2014. "Feedback equilibria in a dynamic renewable resource oligopoly: Pre-emption, voracity and exhaustion," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 115-122.
    6. Luca Lambertini, 2016. "Managerial Delegation in a Dynamic Renewable Resource Oligopoly," Dynamic Modeling and Econometrics in Economics and Finance, in: Herbert Dawid & Karl F. Doerner & Gustav Feichtinger & Peter M. Kort & Andrea Seidl (ed.), Dynamic Perspectives on Managerial Decision Making, pages 93-107, Springer.
    7. Tasneem, Dina & Engle-Warnick, Jim & Benchekroun, Hassan, 2017. "An experimental study of a common property renewable resource game in continuous time," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 91-119.
    8. Colombo, Luca & Labrecciosa, Paola, 2013. "On the convergence to the Cournot equilibrium in a productive asset oligopoly," Journal of Mathematical Economics, Elsevier, vol. 49(6), pages 441-445.
    9. Luca Colombo & Paola Labrecciosa & Agnieszka Rusinowska, 2022. "A Dynamic Analysis of Criminal Networks," Documents de travail du Centre d'Economie de la Sorbonne 22006r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Jun 2023.
    10. Kenji Fujiwara, 2010. "When Are Voluntary Export Restraints Voluntary? A Differential Game Approach," Australian Economic Papers, Wiley Blackwell, vol. 49(2), pages 101-110, June.
    11. Colombo, Luca & Labrecciosa, Paola, 2015. "On the Markovian efficiency of Bertrand and Cournot equilibria," Journal of Economic Theory, Elsevier, vol. 155(C), pages 332-358.
    12. Santiago J. Rubio, 2002. "On The Coincidence Of The Feedback Nash And Stackelberg Equilibria In Economic Applications Of Differential Games," Working Papers. Serie AD 2002-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    13. Lambertini, Luca & Mantovani, Andrea, 2016. "On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation," Economics Letters, Elsevier, vol. 143(C), pages 9-12.
    14. Zaruhi Hakobyan & Christos Koulovatianos, 2021. "Symmetric Markovian Games of Commons with Potentially Sustainable Endogenous Growth," Dynamic Games and Applications, Springer, vol. 11(1), pages 54-83, March.
    15. Benchekroun, Hassan & Long, Ngo Van, 2008. "The build-up of cooperative behavior among non-cooperative selfish agents," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 239-252, July.
    16. Eggert, Wolfgang & Itaya, Jun-ichi & Mino, Kazuo, 2011. "A dynamic model of conflict and appropriation," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1), pages 167-182.
    17. Luca Grilli & Michele Bisceglia, 2017. "A differential game in a duopoly with instantaneous incentives," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 40(1), pages 317-333, November.
    18. Benchekroun, Hassan & Ray Chaudhuri, Amrita & Tasneem, Dina, 2020. "On the impact of trade in a common property renewable resource oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    19. Javier Frutos & Guiomar Martín-Herrán, 2018. "Selection of a Markov Perfect Nash Equilibrium in a Class of Differential Games," Dynamic Games and Applications, Springer, vol. 8(3), pages 620-636, September.
    20. K. Hori & A. Shibata, 2010. "Dynamic Game Model of Endogenous Growth with Consumption Externalities," Journal of Optimization Theory and Applications, Springer, vol. 145(1), pages 93-107, April.

    More about this item

    Keywords

    Di erential game; Asymmetric oligopoly; Feedback strategy;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kgu:wpaper:51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Toshihiro Okada (email available below). General contact details of provider: https://edirc.repec.org/data/dekgujp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.