Alternative Objectives in an Oligopoly Model: An Aggregative Game Approach

33 Pages Posted: 21 Dec 2016

See all articles by Richard C. Cornes

Richard C. Cornes

Australian National University (ANU) - Faculty of Economics & Commerce; CESifo (Center for Economic Studies and Ifo Institute)

Jun-ichi Itaya

Hokkaido University - Division of Modern Economics and Management

Date Written: November 23, 2016

Abstract

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

Cornes, Richard C. and Itaya, Jun-ichi, Alternative Objectives in an Oligopoly Model: An Aggregative Game Approach (November 23, 2016). CESifo Working Paper Series No. 6191. Available at SSRN: https://ssrn.com/abstract=2887957

Richard C. Cornes

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, Australian Capital Territory 2601
Australia

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Jun-ichi Itaya (Contact Author)

Hokkaido University - Division of Modern Economics and Management ( email )

Sapporo 060-0809
Japan

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