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A GENERALIZED OLIGOPOLY MODEL WITH CONJECTURAL VARIATIONS
Author(s) -
Julien Ludovic A.,
Musy Olivier
Publication year - 2011
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2010.04112.x
Subject(s) - oligopoly , economics , stackelberg competition , generalization , mathematical economics , constant (computer programming) , welfare , convergence (economics) , marginal cost , outcome (game theory) , microeconomics , comparative statics , partial equilibrium , competitive equilibrium , general equilibrium theory , cournot competition , mathematics , computer science , macroeconomics , market economy , mathematical analysis , programming language
This paper considers a generalization of the Stackelberg model to cover a T ‐stage framework with several leaders and followers who compete on quantities. Assuming a linear demand function and constant marginal costs, we introduce constant conjectural variations in order to capture various structures of competition. First, we characterize the equilibrium market outcome. Second, we study the influence of conjectures on welfare. We notably propose a welfare comparison for six symmetric equilibria. Third, we consider convergence analysis, and we also show that the competitive equilibrium is a consistent oligopoly equilibrium.