Alternative Objectives in an Oligopoly Model: An Aggregative Game Approach
33 Pages Posted: 21 Dec 2016
Date Written: November 23, 2016
A rapidly growing literature analyzes models in which firms maximize objectives other than profit and enjoy market power. Examples include the labor-managed firm, mixed oligopoly, and delegation models. These models typically retain the aggregative structure of the conventional Cournot model of imperfect competition. We exploit this fact and apply the framework recently developed by Cornes and Hartley (2005, 2011) to analyze the properties of the equilibrium in such games. We show that existing treatments often make more restrictive assumptions than necessary to generate their results. Specifically, we identify conditions sufficient to ensure the existence of a unique equilibrium, and we explore the comparative static properties of these conditions.
Keywords: aggregative game, oligopoly, Hahn’s Condition, non-profit maximization, share function
JEL Classification: C720, D430, L210
Suggested Citation: Suggested Citation