The Effects of Market Structure on Industry Growth
AbstractWe study the behavior of firms in an imperfectly competitive environment in which firms influence the evolution of the stock of capital equipment. Our model enables us, using analytical characterizations, to show the effect of key ingredients of dynamic competition on firm strategies and industry dynamics in addition to the usual static interaction. These effects are the static market externality (implicit in the static Cournot Equilibrium) as well as the dynamic market externality due to the effect on the market outputs of a capital stock and a dynamic externality that stems from the competition between firms for the capital stock. These strategic elements justify our conclusions, based on the study of four market structures, for the link between industrial organization and industry growth.
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Bibliographic InfoPaper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 7-2003.
Length: 46 pages
Date of creation: Nov 2003
Date of revision:
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Web page: http://www.econ.ucy.ac.cy
Cournot competition; oligopolistic non-cooperative dynamic games;
Other versions of this item:
- Christos Koulovatianos & Leonard J. Mirman, 2004. "The Effects of Market Structure on Industry Growth," 2004 Meeting Papers 639, Society for Economic Dynamics.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-16 (All new papers)
- NEP-COM-2003-11-16 (Industrial Competition)
- NEP-TID-2003-11-16 (Technology & Industrial Dynamics)
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