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Market Games in Successive Oligopolies
Author(s) -
GABSZEWICZ JEAN,
LAUSSEL DIDIER,
YPERSELE TANGUY,
ZANAJ SKERDILAJDA
Publication year - 2013
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12023
Subject(s) - oligopoly , downstream (manufacturing) , upstream (networking) , market power , upstream and downstream (dna) , outcome (game theory) , microeconomics , market structure , economics , industrial organization , computer science , cournot competition , operations management , telecommunications , monopoly
Abstract This paper introduces a new approach to successive oligopolies. We draw on market games à la Shapley–Shubik to examine how successive oligopolies operate between downstream and upstream markets when the input price is determined by the action of all firms, downstream and upstream both. This approach differs from the classical one as it allows us to consider downstream firms that exercise market power both in both downstream and upstream markets. We perform a comparison of the market outcome with each scenarios as well as a welfare analysis.