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Alternative Objectives in an Oligopoly Model : An Aggregative Game Approach

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  • Itaya, Jun-ichi
  • Cornes, Richard

Abstract

A rapidly growing literature analyzes models in which firms maximize objectives other than profit and enjoy market power. Examples include the labor-managed firm, mixed oligopoly, and delegation models. These models typically retain the aggregative structure of the conventional Cournot model of imperfect competition. We exploit this fact and apply the framework recently developed by Cornes and Hartley (2005, 2011) to analyze the properties of the equilibrium in such games. We show that existing treatments often make more restrictive assumptions than necessary to generate their results. Specifically, we identify conditions sufficient to ensure the existence of a unique equilibrium, and we explore the comparative static properties of these conditions.

Suggested Citation

  • Itaya, Jun-ichi & Cornes, Richard, 2016. "Alternative Objectives in an Oligopoly Model : An Aggregative Game Approach," Discussion paper series. A 307, Graduate School of Economics and Business Administration, Hokkaido University.
    • Handle: RePEc:hok:dpaper:307
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    References listed on IDEAS

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    1. F. H. Hahn, 1962. "The Stability of the Cournot Oligopoly Solution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 329-331.
    2. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-940, December.
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    7. Cornes, Richard & Hartley, Roger, 2012. "Fully aggregative games," Economics Letters, Elsevier, vol. 116(3), pages 631-633.
    8. R Cornes & R Hartley, 2005. "The Geometry of Aggregative Games," Economics Discussion Paper Series 0514, Economics, The University of Manchester.
    9. Jansen, Thijs & van Lier, Arie & van Witteloostuijn, Arjen, 2007. "A note on strategic delegation: The market share case," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 531-539, June.
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    Cited by:

    1. Alex Dickson & Ian A. MacKenzie & Petros G. Sekeris, 2019. "Non-linear revenue evaluation in oligopoly," Discussion Papers Series 611, School of Economics, University of Queensland, Australia.
    2. Lisa Planer-Friedrich & Marco Sahm, 2017. "Strategic Corporate Social Responsibility," CESifo Working Paper Series 6506, CESifo.
    3. Gerasimos T. Soldatos, 2020. "Technical inefficiency and output scale in banking and industry," Economics and Business Letters, Oviedo University Press, vol. 9(3), pages 270-278.
    4. Ristić Bojan & Trifunović Dejan & Herceg Tomislav, 2021. "Capacity Competition in Differentiated Oligopolies: Entry Deterrence with Alternative Objective Functions," South East European Journal of Economics and Business, Sciendo, vol. 16(1), pages 84-92, June.
    5. Alex Dickson & Ian A. MacKenzie & Petros G. Sekeris, 2022. "Non‐linear revenue evaluation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(5), pages 487-505, November.
    6. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Strategic corporate social responsibility," BERG Working Paper Series 124, Bamberg University, Bamberg Economic Research Group.
    7. Lisa Planer-Friedrich & Marco Sahm, 2020. "Strategic corporate social responsibility, imperfect competition, and market concentration," Journal of Economics, Springer, vol. 129(1), pages 79-101, January.

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    More about this item

    Keywords

    Aggregative Game; Oligopoly; Hahn’s Condition; Non-profit Maximization; Share Function;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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