Indeterminate Output Allocations in Collusive Equilibria and Multi-plant Firms
AbstractIf n colluding oligopolists all have the cost function C(q_i) = c * q_i, then it will not be possible to uniquely allocate among the firms the monopoly output that maximizes their joint profit. Similarly, if all plants of an n-plant firm have the cost function C(q_i) = c * q_i, then it will not be possible to uniquely allocate the firm's optimal output among the n plants. This paper identifies the necessary and sufficient conditions for such "allocative indeterminacies" to occur (i.e., the conditions to be avoided).
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Bibliographic InfoPaper provided by EconWPA in its series Microeconomics with number 9507001.
Length: 9 pages
Date of creation: 25 Jul 1995
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production theory; functional forms; ind. org.;
Find related papers by JEL classification:
- D1 - Microeconomics - - Household Behavior
- D2 - Microeconomics - - Production and Organizations
- D3 - Microeconomics - - Distribution
- D4 - Microeconomics - - Market Structure and Pricing
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- Friedman,James, 1983.
Cambridge University Press, number 9780521282444, December.
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