Demand shifts and imperfect competition
AbstractThe effects of demand shifts on output, price and profits in imperfectly competitive industries with no entry or exit are derived. Four types of demand shift are modelled: additive and multiplicative shifts of the demand and inverse demand functions. Necessary and sufficient conditions for output, price and profits to increase with an outward demand shift are derived for each case. Either output or the price, but not both, may fall with a positive demand shift. Profits may also fall for a Cournot oligopoly. Log-concavity of the direct demand function is sufficient for the standard results to go through.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 188.
Date of creation: 01 Mar 2004
Date of revision:
Comparative Statics; Monopoly; Oligopoly; Log-concavity.;
Find related papers by JEL classification:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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.:
- Tim Baldenius & Stefan Reichelstein, 2000. "Comparative statics of monopoly pricing," Economic Theory, Springer, vol. 16(2), pages 465-469.
- Hamilton, Stephen F., 1999. "Demand shifts and market structure in free-entry oligopoly equilibria," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 259-275, February.
- Seade, J, 1985. "Profitable Cost Increases and the Shifting of Taxation : Equilibrium Response of Markets in Oligopoly," The Warwick Economics Research Paper Series (TWERPS) 260, University of Warwick, Department of Economics.
- Green, Edward J. & Porter, Robert H., 1982.
"Noncooperative Collusion Under Imperfect Price Information,"
367, California Institute of Technology, Division of the Humanities and Social Sciences.
- Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
- Edward J Green & Robert H Porter, 1997. "Noncooperative Collusion Under Imperfect Price Information," Levine's Working Paper Archive 1147, David K. Levine.
- Seade, Jesus, 1980. "The stability of cournot revisited," Journal of Economic Theory, Elsevier, vol. 23(1), pages 15-27, August.
- Schlee, Edward E., 1993. "A curvature condition ensuring uniqueness of Cournot equilibrium, with applications to comparative statics," Economics Letters, Elsevier, vol. 41(1), pages 29-33.
- Glenn Ellison, 1994. "Theories of Cartel Stability and the Joint Executive Committee," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 37-57, Spring.
- Rabah Amir & Val E. Lambson, 1998.
"On the Effects of Entry in Cournot Markets,"
CIE Discussion Papers
1998-06, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- AMIR, Rabah & LAMBSON, Val, 1999. "On the effects of entry in Cournot markets," CORE Discussion Papers 1999059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Rabah Amir, 2000. "On the Effects of Entry in Cournot Markets," Econometric Society World Congress 2000 Contributed Papers 1475, Econometric Society.
- Cowan, Simon, 2004. "Optimal risk allocation for regulated monopolies and consumers," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 285-303, January.
- Avinash Dixit & Victor Norman, 1978. "Advertising and Welfare," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 1-17, Spring.
- Justin P. Johnson & David P. Myatt, 2006.
"On the Simple Economics of Advertising, Marketing, and Product Design,"
American Economic Review,
American Economic Association, vol. 96(3), pages 756-784, June.
- David P. Myatt & Justin P. Johnson, 2004. "On the Simple Economics of Advertising, Marketing, and Product Design," Economics Series Working Papers 185, University of Oxford, Department of Economics.
- Carl Shapiro, 1980. "Advertising and Welfare: Comment," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 749-752, Autumn.
- Rotemberg, Julio J & Saloner, Garth, 1986. "A Supergame-Theoretic Model of Price Wars during Booms," American Economic Review, American Economic Association, vol. 76(3), pages 390-407, June.
- Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x.
- Friedman, David, 1987. "Cold Houses in Warm Climates and Vice Versa: A Paradox of Rational Heating," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 1089-97, October.
- Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-93, June.
- Seade, Jesus K, 1980. "On the Effects of Entry," Econometrica, Econometric Society, vol. 48(2), pages 479-89, March.
- Fluet, Claude & Phaneuf, Louis, 1997. "Price adjustment costs and the effect of endogenous technique on price stickiness," European Economic Review, Elsevier, vol. 41(2), pages 245-257, February.
- Quirmbach, Herman C, 1988. "Comparative Statics for Oligopoly: Demand Shift Effects," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(3), pages 451-59, August.
- Robert H. Porter, 1983. "A Study of Cartel Stability: The Joint Executive Committee, 1880-1886," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 301-314, Autumn.
- David, Maia & Nimubona, Alain-Désiré & Sinclair-Desgagné, Bernard, 2011. "Emission taxes and the market for abatement goods and services," Resource and Energy Economics, Elsevier, vol. 33(1), pages 179-191, January.
- Jesse M. Cunha & Giacomo De Giorgi & Seema Jayachandran, 2011.
"The Price Effects of Cash Versus In-Kind Transfers,"
NBER Working Papers
17456, National Bureau of Economic Research, Inc.
- Cunha, Jesse & De Giorgi, Giacomo & Jayachandran, Seema, 2011. "The Price Effects of Cash Versus In-Kind Transfers," CEPR Discussion Papers 8581, C.E.P.R. Discussion Papers.
- Özelkan, Ertunga C. & ÇakanyIldIrIm, Metin, 2009. "Reverse bullwhip effect in pricing," European Journal of Operational Research, Elsevier, vol. 192(1), pages 302-312, January.
- Han, Sungill & Chung, Chanjin & Suh, Daeseok, 2011. "Generic Advertising in Concentrated and Differentiated Agricultural Markets," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103739, Agricultural and Applied Economics Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise).
If references are entirely missing, you can add them using this form.