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Cournot Competition (cournot + competition)
Selected AbstractsCOURNOT COMPETITION IN A TWO-DIMENSIONAL CIRCULAR CITYTHE MANCHESTER SCHOOL, Issue 1 2005MARĶA ISABEL BERENGUER MALDONADO In this paper we develop a Cournot competition model between two firms located in a two-dimensional circular city. This city consists of a circumference and all the points in its interior for which movement between any two points can be made in a straight line. Firms have zero costs and market demand is symmetrically linear. We show that there exists a single state of equilibrium in which the firms agglomerate in the centre of the circle. [source] The Impact of Capital Structure on Efficient Sourcing and Strategic BehaviorFINANCIAL REVIEW, Issue 4 2000Sudha Krishnaswami D43/G32/L14 Abstract We model the capital structure choice of a firm that operates under imperfect competition. Extant literature demonstrates that debt commits a firm to an aggressive output stance, which is an advantage to the firm under Cournot competition. However, empirical evidence, indicates that debt is a disadvantage under imperfect competition. We reconcile the theory with the evidence by incorporating firms' relations with their suppliers, in a model of strategic firmrival interactions. Under imperfect competition and incomplete contracting, we show that although debt financing improves a firm's input sourcing efficiency it could also benefit the firm's rivals by lowering their input costs. This effect offsets the benefits due to aggressive product market strategies that result from increased debt. Under certain conditions this subsidy effect is sufficiently strong that debt is suboptimal in equilibrium and leads to an increase in rival's shareholder value. [source] Choosing the partners in the licensing allianceMANAGERIAL AND DECISION ECONOMICS, Issue 4 2006Soo Jeoung Sohn I consider a situation in which the incumbent strategically adopts the licensing alliance, facing potential entrants. The queue of entrants consists of two firms, the ,strong' entrant and the ,weak' entrant, who differ in their productivities. The incumbent sets a licensing fee and offers it to the entrants. Each entrant decides whether or not to buy the licensing alliance. After the set of the licensing alliance is determined, they engage in the Cournot competition. I examine the optimal licensing fee, and show that the optimal licensing fee is to charge a discriminatory royalty to each licensee. I also examine the licensing policy on the partner(s): To whom should the licensor license its technology? By comparing the equilibrium expected payoffs for the licensor, I show that licensing to both entrants would be preferred to licensing to a single entrant. But, if the licensor faces the problem on choosing the partner, he prefers the licensing of the weak entrant to the strong entrant. Copyright © 2006 John Wiley & Sons, Ltd. [source] COMPETITION AND WELFARE: THE IMPLICATIONS OF LICENSING,THE MANCHESTER SCHOOL, Issue 1 2010ARIJIT MUKHERJEE If firms with asymmetric costs can engage in technology licensing, we show that welfare may be higher under Cournot competition than under Bertrand competition. Under fixed-fee licensing, consumer surplus and welfare are higher under Cournot competition if the technological difference between the firms is moderate. Under royalty licensing, if the bargaining power of the licenser is not very high and the technological difference between the firms is large, consumer surplus and welfare are higher under Cournot competition. We also show that technology licensing has important implications on the profit differential between Bertrand and Cournot competition. [source] EXCESS-ENTRY THEOREM: THE IMPLICATIONS OF LICENSING*THE MANCHESTER SCHOOL, Issue 6 2008ARIJIT MUKHERJEE We show that, in the presence of technology licensing, entry in an industry with Cournot competition may lead to a socially insufficient, number of firms. Insufficient entry occurs if the own marginal cost of the entrant is sufficiently high. Hence, the justification for anticompetitive entry regulation due to the standard excess-entry result may not be justified in the presence of licensing. However, if the own marginal cost of the entrant is very low, licensing may create excessive entry for those entry costs where entry does not occur without licensing; thus licensing reduces social welfare though it increases competition. [source] OPTIMUM-WELFARE AND MAXIMUM-REVENUE TARIFFS IN MIXED OLIGOPOLY WITH FOREIGN COMPETITORSAUSTRALIAN ECONOMIC PAPERS, Issue 1 2010LEONARD F.S. WANG This paper re-examines the important tariff ranking issue under a linear mixed oligopoly model with foreign competitors and asymmetric costs. We demonstrate that under Cournot competition, when the size of domestic private and foreign private firms become more unequally distributed, optimum-welfare tariff will exceed maximum-revenue tariff. We also show that under Stackelberg competition, when the domestic government protects its domestic sector, it will levy higher optimum-welfare tariffs versus maximum-revenue tariffs; however, when it decides to open its doors more for foreign competitors, it will need to levy higher maximum-revenue tariffs versus optimum-welfare tariffs. The above results remain valid whether the domestic public firm acts as a leader or a follower. [source] Divisionalisation and Cournot Competition Yield Bertrand OutcomesAUSTRALIAN ECONOMIC PAPERS, Issue 1 2001Lasheng Yuan Bertrand and Cournot model are the main frameworks in the analysis of oligopolistic competition. The outcomes from them are however different. Using a simultaneous-move two-stage game, this article shows that, in a homogeneous product market with fairly general demand, the Bertrand outcomes can be achieved by a combination of divisionalisation and ensuing Cournot competition. This finding can be viewed as an extension to or complements of Kreps and Scheinkman (1983), who show that Cournot outcomes can be achieved by quantity precommitment and Bertrand competition. [source] | ||||||||||