Statistical moments analysis of production and welfare in multi-product Cournot oligopoly
Our context involves N Cournot oligopolists producing M products at constant marginal costs when preferences are quasi-linear. We identify relationships between second moments of unit costs and second moments of firm-level production. For example, a larger variance in unit costs of a product increases own output variance and the variance of any other output. We also investigate how second moments of unit costs affect industry cost efficiency. Industry costs can rise if the wrong firm secures a cost reduction. For quadratic preferences, it is shown that Zhao's (Zhao, J., 2001. A characterization for the negative welfare effects of cost reduction in Cournot oligopoly. International Journal of Industrial Organization 19, 455-469 (3-4, March)) share criteria for an increase in unit costs to increase welfare extend to the multi-product setting.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wang, X. Henry & Zhao, Jingang, 2007. "Welfare reductions from small cost reductions in differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(1), pages 173-185, February.
- Greg Shaffer & Stephen W. Salant, 1999. "Unequal Treatment of Identical Agents in Cournot Equilibrium," American Economic Review, American Economic Association, vol. 89(3), pages 585-604, June.
- Long, Ngo Van & Soubeyran, Antoine, 2001.
"Cost Manipulation Games in Oligopoly, with Costs of Manipulating,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 505-33, May.
- Ngo Van Long & Antoine Soubeyran, 1999. "Cost Manipulation Games in Oligopoly, with Costs of Manipulating," CIRANO Working Papers 99s-13, CIRANO.
- Ngo Van Long & Antoine Soubeyran, 2002.
"Selective Penalization Of Polluters: An Inf-Convolution Approach,"
CIRANO Working Papers
- Ngo Long & Antoine Soubeyran, 2005. "Selective penalization of polluters: an inf-convolution approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(2), pages 421-454, 02.
- Giancarlo Moschini & Daniele Moro & Richard D. Green, 1994.
"Maintaining and Testing Separability in Demand Systems,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 76(1), pages 61-73.
- Moschini, GianCarlo & Moro, D. & Green, Richard D., 1994. "Maintaining and Testing Separability in Demand Systems," Staff General Research Papers 11247, Iowa State University, Department of Economics.
- Lapan, Harvey E. & Hennessy, David A., 2006. "A note on cost arrangement and market performance in a multi-product Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 583-591, May.
- Fevrier, Philippe & Linnemer, Laurent, 2004. "Idiosyncratic shocks in an asymmetric Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 835-848, June.
- Ngo, Van Long & Soubeyran, Antoine, 1997.
"Cost heterogeneity, industry concentration and strategic trade policies,"
Journal of International Economics,
Elsevier, vol. 43(1-2), pages 207-220, August.
- Van Long, N. & Soubeyran, A., 1996. "Cost Heterogeneity, Industry Concentration and Startegic Trade Policies," G.R.E.Q.A.M. 96a39, Universite Aix-Marseille III.
- Zhao, Jingang, 2001.
"A characterization for the negative welfare effects of cost reduction in Cournot oligopoly,"
International Journal of Industrial Organization,
Elsevier, vol. 19(3-4), pages 455-469, March.
- Jingang Zhao, 1999. "A Characterization of the Negative Welfare Effects of Cost Reduction in Cournot Oligopoly," Working Papers 99-06, Ohio State University, Department of Economics.
- Lahiri, Sajal & Ono, Yoshiyasu, 1988. "Helping Minor Firms Reduces Welfare," Economic Journal, Royal Economic Society, vol. 98(393), pages 1199-1202, December.
- Bergstrom, Theodore C. & Varian, Hal R., 1985. "Two remarks on Cournot equilibria," Economics Letters, Elsevier, vol. 19(1), pages 5-8.
- Grossmann, Volker, 2007. "Firm size and diversification: Multiproduct firms in asymmetric oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(1), pages 51-67, February.
- Seade, J, 1985. "Profitable Cost Increases and the Shifting of Taxation : Equilibrium Response of Markets in Oligopoly," The Warwick Economics Research Paper Series (TWERPS) 260, University of Warwick, Department of Economics.
- Lapan, Harvey E. & Hennessy, David A., 2006. "Note on Cost Arrangement and Market Performance in a Multi-Product Cournot Oligopoly, A," Staff General Research Papers 12720, Iowa State University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:eee:indorg:v:26:y:2008:i:2:p:598-606. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.