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Hierarchical competition and heterogeneous behavior in noncooperative oligopoly markets

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  • Ludovic A. Julien

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we consider a sequential bilateral oligopoly market which embodies a finite number of leaders and followers who compete on quantities. We define a noncooperative equilibrium concept for this two-stage market game with complete and perfect information, namely the Stackelberg-Nash equilibrium (SNE). Then, we study the existence of a SNE with trade. The existence proof requires some steps as this market game displays a rich set of strategic interactions. In particular, to show the existence of a pure strategy subgame perfect Nash equilibrium, we have to determine the conditions under which there exist well defined continuously differentiable best responses. Some examples buttress the approach and discuss the assumptions made on the primitives.

Suggested Citation

  • Ludovic A. Julien, 2017. "Hierarchical competition and heterogeneous behavior in noncooperative oligopoly markets," Working Papers hal-04141649, HAL.
    • Handle: RePEc:hal:wpaper:hal-04141649
    Note: View the original document on HAL open archive server: https://hal.science/hal-04141649
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    References listed on IDEAS

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    More about this item

    Keywords

    Best responses; Stackelberg-Nash equilibrium; trade; autarky;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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