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Factor market effects upon product market equilibrium

Author

Listed:
  • Gregory E. Goering

    (Department of Economics, School of Management, University of Alaska, Fairbanks, AK 99775, USA)

  • Michael K. Pippenger

    (Department of Economics, School of Management, University of Alaska, Fairbanks, AK 99775, USA)

  • R. Kelley Pace

    (Department of Finance, E.J. Ourso College of Business, Louisiana State University, Baton Rouge, LA 70803, USA)

Abstract

Conventional duopoly models typically assume agents possess specific conjectures concerning other agents' behavior. In this paper equilibrium conjectures are endogenous and are a result of a joint factor market and product market equilibrium. Factor markets affect product markets since potential managers or owners of firms engage in product market competition and compete for corporate control in labor or capital markets. The resulting factor and product market joint equilibrium (FPE) endogenizes conjectures and can thus potentially endogenize market structure. This approach provides economic rationales for both Stackelberg and consistent conjectural equilibria. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • Gregory E. Goering & Michael K. Pippenger & R. Kelley Pace, 1999. "Factor market effects upon product market equilibrium," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 37-43.
    • Handle: RePEc:wly:mgtdec:v:20:y:1999:i:1:p:37-43
    DOI: 10.1002/(SICI)1099-1468(199902)20:1<37::AID-MDE913>3.0.CO;2-3
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    References listed on IDEAS

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