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on Industrial Organization |
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Issue of 2014‒09‒29
three papers chosen by |
| By: | Simon P. Anderson, Nisvan Erkal and |
| Abstract: | We use cumulative reaction functions to compare long-run market structures in aggregative oligopoly games. We fi?rst compile an IO toolkit for aggregative games. We show strong neutrality properties across market structures. The aggregator stays the same, despite changes in the number of ?rooms and their actions. The IIA property of demands (CES and logit) implies that consumer surplus depends on the aggregator alone, and that the Bertrand pricing game is aggregative. We link together the following results: merging parties? pro?ts fall but consumer surplus is unchanged, Stackelberg leadership raises welfare, monopolistic competition is the market structure with the highest surplus. |
| Keywords: | Aggregative games; oligopoly theory; entry; strategic substitutes and |
| JEL: | D43 L13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:1175&r=ind |
| By: | Miraldo, M; Crea, G; Longo, R; Street, A |
| Date: | 2014–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:imp:wpaper:15402&r=ind |
| By: | Ioannis N. Pinopoulos (Department of Economics, University of Macedonia, Greece) |
| Abstract: | We consider a simple model where downstream firms (retailers) carry the product of an upstream supplier (manufacturer). Under very general demand conditions, we show that, when downstream entry is endogenously dependent on profitability conditions, the optimal wholesale price charged by the manufacturer is higher under competitive conditions than under monopolistic conditions in the downstream market. The well-known result of the upstream supplier’s pricing policy being invariant to downstream market structure is reversed when free entry in the downstream market is taken into account. |
| Keywords: | Pricing, Supply chains, Equilibrium, Competition, Free entry. |
| JEL: | L22 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mcd:mcddps:2014_05&r=ind |