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Dynamic oligopoly with partial cooperation and antitrust threshold

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  • Matsumoto, Akio
  • Merlone, Ugo
  • Szidarovszky, Ferenc

Abstract

A general framework of partial cooperation and shareholding interlocks in oligopolies is first introduced, and then the best responses of the firms are determined. The monotonic dependence of the equilibrium industry output on the cooperation levels of the firms is proved. Conditions are given for the local asymptotic stability of the equilibrium which require sufficiently small speed of adjustments. Antitrust thresholds are then introduced into the model which may result in the loss of equilibrium or in the presence of multiple equilibria. The dynamic behavior of the associated dynamic models with adaptive output adjustments also becomes more complex: period-2 cycles may emerge and coexist with stationary states.

Suggested Citation

  • Matsumoto, Akio & Merlone, Ugo & Szidarovszky, Ferenc, 2010. "Dynamic oligopoly with partial cooperation and antitrust threshold," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 259-272, February.
    • Handle: RePEc:eee:jeborg:v:73:y:2010:i:2:p:259-272
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    References listed on IDEAS

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    5. Ugo Merlone, 2001. "Cartelizing effects of horizontal shareholding interlocks," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(6), pages 333-337.
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    Cited by:

    1. Akio Matsumoto & Ugo Merlone & Ferenc Szidarovszky, 2008. "Cartelizing Groups In Dynamic Linear Oligopoly With Antitrust Threshold," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 10(04), pages 399-419.
    2. Ohnishi, Kazuhiro, 2021. "The environmental effect of ambient charges in mixed triopoly with diverse firm objectives," MPRA Paper 108521, University Library of Munich, Germany.
    3. Merlone, Ugo & Szidarovszky, Ferenc, 2015. "Dynamic oligopolies with contingent workforce and investment costs," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 108(C), pages 144-154.
    4. Merlone, Ugo & Szidarovszky, Ferenc, 2022. "Cournot oligopoly when the competitors operate under capital constraints," Chaos, Solitons & Fractals, Elsevier, vol. 160(C).

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    More about this item

    Keywords

    Oligopolies Partial cooperation Shareholding interlocks Antitrust threshold;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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