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Cost Arrangement and Welfare in a Multi-Product Cournot Oligopoly

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  • Lapan, Harvey E.
  • Hennessy, David A.

Abstract

Welfare in a two-product Cournot oligopoly is shown to increase (decrease) with an increase in correlation between unit costs when the outputs complement (substitute) in demand. A more qualified correlation structure is required for the result to apply in a three-product Cournot oligopoly when products complement in demand.

Suggested Citation

  • Lapan, Harvey E. & Hennessy, David A., 2004. "Cost Arrangement and Welfare in a Multi-Product Cournot Oligopoly," Staff General Research Papers Archive 12207, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:12207
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    File URL: http://www2.econ.iastate.edu/papers/p3905-2004-10-23.pdf
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    References listed on IDEAS

    as
    1. Hennessy, David A. & Lapan, Harvey E., 2003. "Definition of 'More Systematic Risk' With Some Welfare Implications, A," Staff General Research Papers Archive 10110, Iowa State University, Department of Economics.
    2. Harvey E. Lapan & David A. Hennessy, 2002. "Symmetry and order in the portfolio allocation problem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(4), pages 747-772.
    3. Long, Ngo Van & Soubeyran, Antoine, 2001. "Cost Manipulation Games in Oligopoly, with Costs of Manipulating," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 505-533, May.
    4. Fevrier, Philippe & Linnemer, Laurent, 2004. "Idiosyncratic shocks in an asymmetric Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 835-848, June.
    5. Boland, Philip J. & Proschan, Frank, 1988. "Multivariate arrangement increasing functions with applications in probability and statistics," Journal of Multivariate Analysis, Elsevier, vol. 25(2), pages 286-298, May.
    6. Theodore C. Bergstrom & Hal R. Varian, 1985. "When Are Nash Equilibria Independent of the Distribution of Agents' Characteristics?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(4), pages 715-718.
    7. David A. Hennessy & Harvey E. Lapan, 2003. "A Definition of 'More Systematic Risk' with Some Welfare Implications," Economica, London School of Economics and Political Science, vol. 70(279), pages 493-507, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    complementarity; arrangement increasing; invariance;
    All these keywords.

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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