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Endogenous mode of competition in general equilibrium
Neary, J. Peter; Tharakan, Joe
This paper endogenises the extent of intra-sectoral competition in a multi-sectoral model of oligopoly in general equilibrium. Firms choose capacity followed by prices. If the benefits of capacity investment in a given sector are below a threshold level, the sector exhibits Bertrand behaviour,otherwise it exhibits Cournot behaviour. By endogenising the threshold parameter in general equilibrium, we show how exogenous shocks alter the mix of sectors between "more" and "less" competitive, or Bertrand and Cournot. The model also has implications for the effects of trade liberalisation and technological change on the relative wages of skilled and unskilled workers. Irish Research Council for the Humanities and Social Sciences ; European Commission
Keyword(s): Bertrand and Cournot competition; GOLE (General Oligopolistic Equilibrium); Kreps- Scheinkman; Market integration; F10; F12; L13; International trade; Oligopolies; Competition, Imperfect
Publication Date:
2009
Type: Working paper
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
Publisher(s): University College Dublin. School of Economics
File Format(s): other; application/pdf
First Indexed: 2012-08-25 05:22:48 Last Updated: 2018-10-11 15:44:40