Contributions to oligopoly theory
AbstractIn the context of the Cournot model a demand function parameter is treated as the dual of the firm’s profit. Following the demand theory’s duality approach it’s possible to introduce the concept of the compensated reaction function (or compensated best-response function), as well as the concepts of net strategic complementarity/substitutability. The firm’s reaction function is analysed into a type-1 and a type-2 effect, which are the counterparts, respectively, of the demand theory substitution and income effects. Further, new results are obtained regarding Cournot equilibrium in the case of profit functions which are homogeneous in their arguments.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37267.
Date of creation: 25 Feb 2012
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Cournot model; compensated reaction function; net strategic complementarity/substitutability;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-COM-2012-03-21 (Industrial Competition)
- NEP-HPE-2012-03-21 (History & Philosophy of Economics)
- NEP-IND-2012-03-21 (Industrial Organization)
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