Do Other Firms Matter in Oligopolies?
This paper examines how firms interact with their rivals. The main novelty of the authors' approach is that they let conjectural variations depend on the actual ability of other firms to react, which they measure by both the physical capacity and financial status of firms. The authors' main findings are twofold. First, physical and financial capacity significantly affect conjectures. Second, the authors recover the implied conjectural variations and reject homogeneous conjectures. They generally find that leaders expect aggressive responses and followers are Cournot players. Copyright 1997 by Blackwell Publishing Ltd
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Volume (Year): 45 (1997)
Issue (Month): 1 (March)
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