Author: Shyh-Fang Ueng
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 118
Book Description
This research investigates three issues related to the economic performance of oligopolistic markets where firms produce differentiated products and compete in prices. First of all, this dissertation uses a Markov Perfect Equilibrium approach with fixed periods of commitment of actions to answer the question of what prices a duopolists will charge in equilibrium if they produce horizontally differentiated products, move alternatingly, and compete in prices forever. It is found that firms charge prices which are higher than Nash equilibrium prices but lower than the fully collusive equilibrium prices. Also, contrasted with the Nash equilibrium of the one-shot constituent game, the firm having the significantly higher demand responsiveness to its own price always charges a lower price than the other firm does although it has higher marginal cost. The dissertation then proceeds to study whether a firm can overcome its cost disadvantage by upgrading its product over the rival's, and if so, whether there exists a profit-division which will induce the low cost firm and the high cost firm to collude and no one has an incentive to cheat. The results show that (1) the ability of upgrading the product over the rival's can allow a high cost firm to earn higher profit than a cost advantaged low cost firm; (2) there exists at least one profit-division which can sustain full collusion; and (3) in the collusive equilibrium firms enlarge their quality differences to alleviate the price tension between their products. Finally, this work investigates the welfare effect of mergers which occur in an oligopolistic industry where firms produce differentiated products. It is shown that for the merger to be socially beneficial, the number of the merging firms must be less than the total number of firms in the industry minus the ratio of the products' own elasticity to cross elasticity. The analysis indicates that the welfare effect of a merger of a specific size depends on the substitutability among products of the industry.
Three Essays on Price Competition in Oligopoly
Author: Shyh-Fang Ueng
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 118
Book Description
This research investigates three issues related to the economic performance of oligopolistic markets where firms produce differentiated products and compete in prices. First of all, this dissertation uses a Markov Perfect Equilibrium approach with fixed periods of commitment of actions to answer the question of what prices a duopolists will charge in equilibrium if they produce horizontally differentiated products, move alternatingly, and compete in prices forever. It is found that firms charge prices which are higher than Nash equilibrium prices but lower than the fully collusive equilibrium prices. Also, contrasted with the Nash equilibrium of the one-shot constituent game, the firm having the significantly higher demand responsiveness to its own price always charges a lower price than the other firm does although it has higher marginal cost. The dissertation then proceeds to study whether a firm can overcome its cost disadvantage by upgrading its product over the rival's, and if so, whether there exists a profit-division which will induce the low cost firm and the high cost firm to collude and no one has an incentive to cheat. The results show that (1) the ability of upgrading the product over the rival's can allow a high cost firm to earn higher profit than a cost advantaged low cost firm; (2) there exists at least one profit-division which can sustain full collusion; and (3) in the collusive equilibrium firms enlarge their quality differences to alleviate the price tension between their products. Finally, this work investigates the welfare effect of mergers which occur in an oligopolistic industry where firms produce differentiated products. It is shown that for the merger to be socially beneficial, the number of the merging firms must be less than the total number of firms in the industry minus the ratio of the products' own elasticity to cross elasticity. The analysis indicates that the welfare effect of a merger of a specific size depends on the substitutability among products of the industry.
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 118
Book Description
This research investigates three issues related to the economic performance of oligopolistic markets where firms produce differentiated products and compete in prices. First of all, this dissertation uses a Markov Perfect Equilibrium approach with fixed periods of commitment of actions to answer the question of what prices a duopolists will charge in equilibrium if they produce horizontally differentiated products, move alternatingly, and compete in prices forever. It is found that firms charge prices which are higher than Nash equilibrium prices but lower than the fully collusive equilibrium prices. Also, contrasted with the Nash equilibrium of the one-shot constituent game, the firm having the significantly higher demand responsiveness to its own price always charges a lower price than the other firm does although it has higher marginal cost. The dissertation then proceeds to study whether a firm can overcome its cost disadvantage by upgrading its product over the rival's, and if so, whether there exists a profit-division which will induce the low cost firm and the high cost firm to collude and no one has an incentive to cheat. The results show that (1) the ability of upgrading the product over the rival's can allow a high cost firm to earn higher profit than a cost advantaged low cost firm; (2) there exists at least one profit-division which can sustain full collusion; and (3) in the collusive equilibrium firms enlarge their quality differences to alleviate the price tension between their products. Finally, this work investigates the welfare effect of mergers which occur in an oligopolistic industry where firms produce differentiated products. It is shown that for the merger to be socially beneficial, the number of the merging firms must be less than the total number of firms in the industry minus the ratio of the products' own elasticity to cross elasticity. The analysis indicates that the welfare effect of a merger of a specific size depends on the substitutability among products of the industry.
Three Essays on Price Dispersion and Oligopoly
Author: Paulo de Freitas Guimaraes
Publisher:
ISBN:
Category : Economics, Mathematical
Languages : en
Pages : 306
Book Description
Publisher:
ISBN:
Category : Economics, Mathematical
Languages : en
Pages : 306
Book Description
Three Essays on Successive Vertical Oligopolies
Author: Joon Lim
Publisher:
ISBN:
Category : Oligopolies
Languages : en
Pages : 254
Book Description
Publisher:
ISBN:
Category : Oligopolies
Languages : en
Pages : 254
Book Description
Three Essays on Oligopolistic Competition in an Open Economy
Author: Jai-June Kim
Publisher:
ISBN:
Category :
Languages : en
Pages : 262
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 262
Book Description
Three Essays on Strategic Trading in Oligopolistic Economies
Author: Alexei Boulatov
Publisher:
ISBN:
Category :
Languages : en
Pages : 328
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 328
Book Description
Three Essays on the Economics of Advertising in Oligopoly
Author: Jae-Woo Lee
Publisher:
ISBN:
Category : Oligopolies
Languages : en
Pages : 250
Book Description
Publisher:
ISBN:
Category : Oligopolies
Languages : en
Pages : 250
Book Description
Three Essays on Imperfect Competition in Agricultural Markets
Author: Mingxia Zhang
Publisher:
ISBN:
Category :
Languages : en
Pages : 402
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 402
Book Description
Three Essays on Oligopoly and Financial Structure
Author: Hyun Jong Kim
Publisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages :
Book Description
Publisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages :
Book Description
Essays on Price Competition and Firm Strategies in Oligopolies
Author: Heisnam Thoihen Singh
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Three Essays on Strategic Aspects in Oligopoly with Vertical Structure
Author: Mohammad Ali Kashefi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description