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N-Firm Oligopoly With General Iso-Elastic Demand

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  • Rodney Beard

Abstract

type="main"> In this note oligopoly with iso-elastic demand is analysed. Unlike previous studies we consider general iso-elastic demand rather than the case of unit elasticity. An n-firm Nash-Cournot equilibrium for the case of heterogeneous constant marginal costs is derived. The main result is a closed-form solution that shows the dependency of the equilibrium on the elasticity of demand and the share of industry costs. The result has applications to a wide range of areas in oligopoly theory by allowing comparisons across markets with different elasticities of demand.

Suggested Citation

  • Rodney Beard, 2015. "N-Firm Oligopoly With General Iso-Elastic Demand," Bulletin of Economic Research, Wiley Blackwell, vol. 67(4), pages 336-345, October.
    • Handle: RePEc:bla:buecrs:v:67:y:2015:i:4:p:336-345
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    References listed on IDEAS

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    1. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
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    7. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, January.
    8. Bandyopadhyay, Subhayu, 1997. "Demand elasticities, asymmetry and strategic trade policy," Journal of International Economics, Elsevier, vol. 42(1-2), pages 167-177, February.
    9. Novshek, William & Sonnenschein, Hugo, 1978. "Cournot and Walras equilibrium," Journal of Economic Theory, Elsevier, vol. 19(2), pages 223-266, December.
    10. Waterson, Michael, 1980. "Oligopoly and derived demand," Economics Letters, Elsevier, vol. 5(2), pages 115-118.
    11. Tramontana, Fabio, 2010. "Heterogeneous duopoly with isoelastic demand function," Economic Modelling, Elsevier, vol. 27(1), pages 350-357, January.
    12. Theodore C. Bergstrom & Hal R. Varian, 1985. "When Are Nash Equilibria Independent of the Distribution of Agents' Characteristics?," Review of Economic Studies, Oxford University Press, vol. 52(4), pages 715-718.
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    Cited by:

    1. Kamei, Keita, 2014. "International Trade, Unemployment, and Firm Owners in a General Equilibrium with Oligopoly," MPRA Paper 59388, University Library of Munich, Germany.
    2. repec:spr:joevec:v:27:y:2017:i:5:d:10.1007_s00191-017-0501-0 is not listed on IDEAS
    3. Fabio Tramontana, 2013. "Information exchange in a Cournot duopoly with nonlinear demand function," DEM Working Papers Series 049, University of Pavia, Department of Economics and Management.
    4. Maxime C. Cohen & Ruben Lobel & Georgia Perakis, 2016. "The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption," Management Science, INFORMS, vol. 62(5), pages 1235-1258, May.

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