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Surplus sharing in Cournot oligopoly

Author

Listed:
  • Condorelli, Daniele

    (Department of Economics, University of Warwick)

  • Szentes, Balázs

    (Department of Economics, London School of Economics)

Abstract

We characterize equilibria of oligopolistic markets where identical firms with constant marginal cost compete a' la Cournot. For given maximal willingness to pay and maximal total demand, we first identify all combinations of equilibrium consumer surplus and industry profit that can arise from arbitrary demand functions. Then, as a further restriction, we fix the average willingness to pay above marginal cost (i.e., first-best surplus) and identify all possible triples of consumer surplus, industry profit and deadweight loss.

Suggested Citation

  • Condorelli, Daniele & Szentes, Balázs, 2022. "Surplus sharing in Cournot oligopoly," Theoretical Economics, Econometric Society, vol. 17(3), July.
    • Handle: RePEc:the:publsh:4515
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    Cited by:

    1. Kocourek, Pavel & Steiner, Jakub & Stewart, Colin, 2024. "Boundedly rational demand," Theoretical Economics, Econometric Society, vol. 19(4), November.
    2. Brian C. Albrecht & Mark Whitmeyer, 2023. "Comparison Shopping: Learning Before Buying From Duopolists," Papers 2302.06580, arXiv.org, revised Apr 2023.
    3. Anja Prummer & Francesco Nava, 2023. "Value Design in Optimal Mechanisms," Economics working papers 2023-05, Department of Economics, Johannes Kepler University Linz, Austria.

    More about this item

    Keywords

    Cournot; monopoly;

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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