From Walrasian oligopolies to natural monopolyan: An evolutionary model of market structure
We study a market for a homogeneous good in which firms adjust theirproduction decisions on the basis of imitation, learning from own experience, and local experimentation.For any fixed set of firms (more than one), long run behavior settles on a symmetric marginal-cost pricingequlibrium. When market entry and exit are allowed, we find a sharp effect of technology onlongrun market structure. Specifically, we show that, under decreasing returns and some fixed cost,the market grows to full capacity at Walrasian equlibrium; on the other hand, if returns areincreasing, the unique long run outcome involves a profit-maximizing monopolist.
|Date of creation:||Dec 1997|
|Date of revision:|
|Publication status:||Published by Ivie|
|Contact details of provider:|| Postal: C/ Guardia Civil, 22, Esc 2a, 1o, E-46020 VALENCIA|
Phone: +34 96 319 00 50
Fax: +34 96 319 00 55
Web page: http://www.ivie.es/
More information through EDIRC
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.:
- Fernando Vega Redondo, 1996.
"The evolution of walrasian behavior,"
Working Papers. Serie AD
1996-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Schaffer, Mark E., 1989. "Are profit-maximisers the best survivors? : A Darwinian model of economic natural selection," Journal of Economic Behavior & Organization, Elsevier, vol. 12(1), pages 29-45, August.
- Kandori, M. & Mailath, G.J., 1991.
"Learning, Mutation, And Long Run Equilibria In Games,"
71, Princeton, Woodrow Wilson School - John M. Olin Program.
- Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
- M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
- Robson, Arthur J. & Vega-Redondo, Fernando, 1996.
"Efficient Equilibrium Selection in Evolutionary Games with Random Matching,"
Journal of Economic Theory,
Elsevier, vol. 70(1), pages 65-92, July.
- Arthur J Robson & Fernando Vega-Redondo, 1999. "Efficient Equilibrium Selection in Evolutionary Games with Random Matching," Levine's Working Paper Archive 2112, David K. Levine.
- William Novshek, 1980. "Cournot Equilibrium with Free Entry," Review of Economic Studies, Oxford University Press, vol. 47(3), pages 473-486.
- Rhode, Paul & Stegeman, Mark, 2001. "Non-Nash equilibria of Darwinian dynamics with applications to duopoly," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 415-453, March.
- Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
When requesting a correction, please mention this item's handle: RePEc:ivi:wpasad:1997-24. 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: (Departamento de Edición)
If references are entirely missing, you can add them using this form.