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Stackelberg, Cournot and Collusive Monopoly: Performance and Welfare Comparisons

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  • Levin, Dan

Abstract

This article compares and evaluates performance and welfare in three classical oligopoly models: Stackel berg leader, Cournot, and collusive monopoly. Hahn's stability condit ions render an unambiguous ranking of market price; the monopoly pric e is highest and the Stackelberg price is lowest. Welfare comparisons are less clear-cut due to additional effects coming from reallocatio n of outputs among sellers. Conditions under which these reallocation effects will enhance or offset the unambiguous price effects on welf are are discussed and examples are given. Possible implications for a ntitrust policy, regarding constraints on market share of large produ cers in noncompetitive markets, are examined. Copyright 1988 by Oxford University Press.

Suggested Citation

  • Levin, Dan, 1988. "Stackelberg, Cournot and Collusive Monopoly: Performance and Welfare Comparisons," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 317-330, April.
  • Handle: RePEc:oup:ecinqu:v:26:y:1988:i:2:p:317-30
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    References listed on IDEAS

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    Cited by:

    1. Marco Marini & Giorgio Rodano, 2012. "Sequential vs Collusive Payoffs in Symmetric Duopoly Games," DIAG Technical Reports 2012-06, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    2. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    3. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.

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