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Convolutional Neural Networks to signal currency crises: from the Asian financial crisis to the Covid crisis

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  • Eric AVENEL

    (Univ Rennes, CNRS, CREM – UMR6211, F-35000 Rennes France)

Abstract

The successive Cournot oligopoly model presented in Salinger (1988) is very popular in the literature on vertical relations. There is however a problem in this model, since the assumption of elastic supply on the intermediate market is inconsistent with the assumption that upstream firms choose their output before downstream firms place their orders. I show that dropping the assumption of elastic supply on the intermediate market and complementing the model with a well chosen allocation rule - the competitive rule of Cho and Tang (2014) - restores the validity of the results in Salinger (1988) and the subsequent contributions using the same model.

Suggested Citation

  • Eric AVENEL, 2024. "Convolutional Neural Networks to signal currency crises: from the Asian financial crisis to the Covid crisis," Economics Working Paper Archive (University of Rennes & University of Caen) 2024-02, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:2024-02
    as

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    References listed on IDEAS

    as
    1. Oliver Hart & Jean Tirole, 1990. "Vertical Integration and Market Foreclosure," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990 Micr), pages 205-286.
    2. Sprumont, Yves, 1991. "The Division Problem with Single-Peaked Preferences: A Characterization of the Uniform Allocation Rule," Econometrica, Econometric Society, vol. 59(2), pages 509-519, March.
    3. Zhixin Liu, 2012. "Equilibrium analysis of capacity allocation with demand competition," Naval Research Logistics (NRL), John Wiley & Sons, vol. 59(3‐4), pages 254-265, April.
    4. Michael A. Salinger, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(2), pages 345-356.
    5. Rey, Patrick & Tirole, Jean, 2007. "A Primer on Foreclosure," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 33, pages 2145-2220, Elsevier.
    6. E. Avenel, 2008. "Strategic Vertical Integration Without Foreclosure," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 247-262, June.
    7. Arghya Ghosh & Hodaka Morita & Chengsi Wang, 2022. "Welfare Improving Horizontal Mergers in Successive Oligopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 70(1), pages 89-118, March.
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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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