Oligopolistic competition as a common agency game
In applying the common agency framework to the context of an oligopolistic industry, we want to go beyond the classical dichotomy between Cournot and Bertrand competition. We define two games, the oligopolistic game and the corresponding concept of oligopolistic equilibrium, and an associated auxiliary game that can be interpreted as a common agency game and that has the same set of equilibria. The parameterization of the set of (potential) equilibria in terms of competitive toughness is derived from the first order conditions of this auxiliary game. The enforceability of monopolistic competition, of price and quantity competition, and of collusion is examined in this framework. We then describe the (reduced) set of equilibria one would obtain, first in the nonintrinsic case and then in the case where a global approach would be adopted instead of partial equilibrium approach. Finally, we illustrate the use of the concept of oligopolistic equilibrium and of the corresponding parameterization by referring to the standard case of symmetric quadratic utility.
|Date of creation:||00 Feb 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
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.:
- Claude d'Aspremont & Rodolphe Dos Santos Ferreira & Louis-André Gérard-Varet, 2007.
"Competition For Market Share Or For Market Size: Oligopolistic Equilibria With Varying Competitive Toughness,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 761-784, 08.
- d'ASPREMONT, Claude & DOS SANTOS-FERREIRA, Rodolphe & GÃ‰RARD-VARET, Louis-AndrÃ©, 2003. "Competition for market share or for market size: oligopolistic equilibria with varying competitive toughness," CORE Discussion Papers 2003010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Peters, Michael, 2001.
"Common Agency and the Revelation Principle,"
Econometric Society, vol. 69(5), pages 1349-72, September.
- David Martimort & Lars Stole, 2002.
"The Revelation and Delegation Principles in Common Agency Games,"
Econometric Society, vol. 70(4), pages 1659-1673, July.
- David Martimort & Lars Stole, 2001. "The Revelation and Delegation Principles in Common Agency Games," CESifo Working Paper Series 575, CESifo Group Munich.
- David Martimort & Lars Stole, 2001.
"Contractual Externalities and Common Agency Equilibria,"
CESifo Working Paper Series
581, CESifo Group Munich.
- Martimort David & Stole Lars, 2003. "Contractual Externalities and Common Agency Equilibria," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-40, July.
- Martimort, David & Stole, Lars, 1999. "Contractual Externalities and Common Agency Equilibria," IDEI Working Papers 110, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2003.
- dâ€™ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2004.
"Price-quantity competition with varying toughness,"
CORE Discussion Papers
2004088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Grether, David M & Plott, Charles R, 1984.
"The Effects of Market Practices in Oligopolistic Markets: An Experimental Examination of the Ethyl Case,"
Western Economic Association International, vol. 22(4), pages 479-507, October.
- Grether, David M. & Plott, Charles R., . "The Effects of Market Practices in Oligopolistic Markets: An Experimental Examination of the Ethyl Case," Working Papers 404, California Institute of Technology, Division of the Humanities and Social Sciences.
- d'Aspremont, C & Ferreira, R Dos Santos & Gerard-Varet, L-A, 1991. "Pricing Schemes and Cournotian Equilibria," American Economic Review, American Economic Association, vol. 81(3), pages 666-73, June.
- David Martimort, 1996.
"Exclusive Dealing, Common Agency, and Multiprincipals Incentive Theory,"
RAND Journal of Economics,
The RAND Corporation, vol. 27(1), pages 1-19, Spring.
- Martimort, D., 1992. "Exclusive Dealing, Common Agency and Multiprincipals Incentive Thoery," Papers 92.278, Toulouse - GREMAQ.
- Martimort, David, 1994. "Exclusive Dealing, Common Agency and Multiprincipals Incentive Theory," IDEI Working Papers 43, Institut d'Économie Industrielle (IDEI), Toulouse, revised 1996.
- Hugo Sonnenschein, 1968. "The Dual of Duopoly Is Complementary Monopoly: or, Two of Cournot's Theories Are One," Journal of Political Economy, University of Chicago Press, vol. 76, pages 316.
- David MARTIMORT, 1992.
"Multi-principaux avec anti-sélection,"
Annales d'Economie et de Statistique,
ENSAE, issue 28, pages 1-37.
- Bernheim, B Douglas & Whinston, Michael D, 1986. "Common Agency," Econometrica, Econometric Society, vol. 54(4), pages 923-42, July.
- Claudio Mezzetti, 1997. "Common Agency with Horizontally Differentiated Principals," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 323-345, Summer.
- Charles A. Holt & David T. Scheffman, 1987. "Facilitating Practices: The Effects of Advance Notice and Best-Price Policies," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 187-197, Summer.
- Laussel, Didier & Le Breton, Michel, 2001. "Conflict and Cooperation: The Structure of Equilibrium Payoffs in Common Agency," Journal of Economic Theory, Elsevier, vol. 100(1), pages 93-128, September.
- Doyle, Christopher, 1988. "Different selling strategies in Bertrand oligopoly," Economics Letters, Elsevier, vol. 28(4), pages 387-390.
- David Martimort & Lars Stole, 2009. "Market participation in delegated and intrinsic common-agency games," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 78-102.
- Ehud Kalai & Mark A. Satterthwaite, 1986. "The Kinked Demand Curve," Discussion Papers 677, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- B. Douglas Bernheim & Michael D. Whinston, 1985. "Common Marketing Agency as a Device for Facilitating Collusion," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 269-281, Summer.
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2005018. 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: (Alain GILLIS)
If references are entirely missing, you can add them using this form.