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On a generalized Cournot oligopolistic competition game

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  • Simai He
  • Xiaoguo Wang
  • Shuzhong Zhang

Abstract

We consider a model whereby players compete for a set of shared resources to produce and sell substitute products in the same market, which can be viewed as a generalization of the classical Cournot oligopolistic competition model, or, from a different angle, the Wardrop type routing model. In particular, we suppose that there are K players, who compete for the usage of resources as well as the sales of the end-products. Moreover, the unit costs of the shared resources and the selling prices of the products are assumed to be affine linear functions in the consumption/production quantities. We show that the price of anarchy in this case is lower bounded by 1/K, and this bound is essentially tight, which manifests the harsh nature of the competitive market for the producers. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Simai He & Xiaoguo Wang & Shuzhong Zhang, 2013. "On a generalized Cournot oligopolistic competition game," Journal of Global Optimization, Springer, vol. 56(4), pages 1335-1345, August.
    • Handle: RePEc:spr:jglopt:v:56:y:2013:i:4:p:1335-1345
    DOI: 10.1007/s10898-012-9844-0
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    References listed on IDEAS

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    1. Roberto Cominetti & José R. Correa & Nicolás E. Stier-Moses, 2009. "The Impact of Oligopolistic Competition in Networks," Operations Research, INFORMS, vol. 57(6), pages 1421-1437, December.
    2. Corchón, Luis C. & Zudenkova, Galina, 2009. "Computing welfare losses from data under imperfect competition with heterogeneous goods," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 646-654, November.
    3. Corchón, Luis C., 2008. "Welfare losses under Cournot competition," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1120-1131, September.
    4. Correa, José R. & Schulz, Andreas S. & Stier-Moses, Nicolás E., 2008. "A geometric approach to the price of anarchy in nonatomic congestion games," Games and Economic Behavior, Elsevier, vol. 64(2), pages 457-469, November.
    5. Patrick Maillé & Nicolás E. Stier-Moses, 2009. "Eliciting Coordination with Rebates," Transportation Science, INFORMS, vol. 43(4), pages 473-492, November.
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