Strategic substitutes and complements in cournot oligopoly with product differentiation

• Authors: Małgorzata Knauff
• Languages of publication: EN

Abstracts

EN

We consider Cournot oligopoly with differentiated product. We develop respective sufficient conditions on the inverse demand and cost function that make the oligopoly a game of strategic substitutes when goods are substitutes and a game of strategic complementarities when goods are complements. The scope of this result is illustrated by examples. JEL classification: C72, L10, L13.

Keywords

EN

Cournot oligopoly; product differentiation; strategic complements and substitutes

• Publisher: Katedra Ekonometrii i Statystyki, Szkoła Główna Gospodarstwa Wiejskiego w Warszawie
• Journal: Metody Ilościowe w Badaniach Ekonomicznych
• Year: 2010
• Volume: 11
• Issue: 1
• Pages: 199-211

Dates

published

2010

Contributors

author

Małgorzata Knauff

• Warsaw School of Economics

References

• Amir R. (1996), Cournot oligopoly and the theory of supermodular games; Games and Economic Behavior, 15, 132-148.
• Amir R. (2005), Supermodularity and complementarity in economics: an elementary survey, Southern Economic Journal, 71(3), 636-660.
• Amir R., Lambson V. (2000), On the effects of entry in Cournot markets, Review of Economic Studies, 67, 235-254.
• Dubey P., Haimanko O., Zapechelnyuk A. (2006), Strategic complements and substitutes, and potential games, Games and Economic Behavior, 54(1), 77-94.
• Hoernig S.H. (2003), Existence of equilibrium and comparative statics in differentiated goods Cournot oligopolies; International Journal of Industrial Organization, 21, 989-1019.
• Novshek W. (1985), On the existence of Cournot equilibria, Review of Economic Studies, 52, 85-98.
• Milgrom P., Roberts J. (1990), Rationalizability, learning, and equilibrium in games with strategic complementarities, Econometrica, 58, 1255-78.
• Milgrom P., Shannon C. (1994), Monotone comparative statics, Econometrica, 62, 157-180.
• Topkis D. (1978), Minimizing a submodular function on a lattice, Operations Research, 26, 305-321.
• Vives X. (1990), Nash equilibrium with strategic complementarities; Journal of Mathematical Economics, 19, 305-321.
• Vives X. (1999), Oligopoly pricing: old ideas and new tools, The MIT Press, Cambridge, Massachusetts