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The road less travelled : oligopoly and competition policy in general equilibrium
Neary, J. Peter
I review previous approaches to modelling oligopoly in general equilibrium, and propose a new view which in principle overcomes their deficiencies: modelling firms as large in their own market but small in the economy as a whole. Implementing this approach requires a tractable specification of preferences. Dixit-Stiglitz preferences (which imply iso-elastic perceived demand functions) could be used, but "continuum-quadratic" preferences (which imply linear perceived demand functions) are more convenient. To illustrate their usefulness, I construct a simple closed-economy model of oligopoly in general equilibrium and derive some surprising implications for competition policy.
Keyword(s): Competition policy; Dixit-Stiglitz preferences; General equilibrium; GOLE (General Oligopolistic Equilibrium); Oligopoly; D50; L13; L40
Publication Date:
2010
Type: Working paper
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
Publisher(s): University College Dublin. Institute for the Study of Social Change (Geary Institute)
File Format(s): other; application/pdf
First Indexed: 2012-08-25 05:21:28 Last Updated: 2018-10-11 15:41:22