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Retail and Wholesale Margins in Successive Cournot Oligopolies

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  • Chongwoo Choe

Abstract

This paper studies the determination of retail and wholesale prices in successive Cournot oligopolies. It is shown that (i) the ratio of retail to wholesale margins increases (decreases, resp.) as the retail part of the market becomes less (more, resp.) competitive; (ii) the ratio of margin in one part of the market to total margin increases (decreases, resp.) as that part of the market becomes less (more, resp.) competitive; (iii) the decline in final consumer price is larger (smaller, resp.) if the entry of additional firm occurs in less (more, resp.) competitive part of the market. The results of the paper are applied to the case of third degree price discrimination.

Suggested Citation

  • Chongwoo Choe, 1999. "Retail and Wholesale Margins in Successive Cournot Oligopolies," Australian Economic Papers, Wiley Blackwell, vol. 38(1), pages 1-8, January.
    • Handle: RePEc:bla:ausecp:v:38:y:1999:i:1:p:1-8
    DOI: 10.1111/1467-8454.00037
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    Cited by:

    1. Tsuruta, Yoshitaka, 2008. "What affects intranational price dispersion?: The case of Japanese gasoline prices," Japan and the World Economy, Elsevier, vol. 20(4), pages 563-584, December.

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