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Dynamic oligopoly with partial cooperation and antitrust threshold

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  • Akio Matsumoto
  • Ugo Merlone
  • Ferenc Szidarovszky

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 coopeation levels of the firms is proved. Conditions are given for the local asymptotic stability of the equilibrium which require sufficiently small speed of adjustment. Antitrust thresholds are then introduced into the model which may result in the loss of equilibrium or in the presense of multiple equilibria. The dynamic behavior of the associate dynamic models with adpative output adjustments also becomes more complex: period-2 cycles may emerge and coexist with stationary states.

Suggested Citation

  • Akio Matsumoto & Ugo Merlone & Ferenc Szidarovszky, 2009. "Dynamic oligopoly with partial cooperation and antitrust threshold," Post-Print hal-00732525, HAL.
    • Handle: RePEc:hal:journl:hal-00732525
    DOI: 10.1016/j.jebo.2009.08.014
    Note: View the original document on HAL open archive server: https://hal.science/hal-00732525
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    References listed on IDEAS

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    1. Flath, David, 1991. "When is it rational for firms to acquire silent interests in rivals?," International Journal of Industrial Organization, Elsevier, vol. 9(4), pages 573-583, December.
    2. Ugo Merlone, 2001. "Cartelizing effects of horizontal shareholding interlocks," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(6), pages 333-337.
    3. Berglof, Erik & Perotti, Enrico, 1994. "The governance structure of the Japanese financial keiretsu," Journal of Financial Economics, Elsevier, vol. 36(2), pages 259-284, October.
    4. Cyert, Richard M & DeGroot, Morris H, 1973. "An Analysis of Cooperation and Learning in a Duopoly Context," American Economic Review, American Economic Association, vol. 63(1), pages 24-37, March.
    5. Yasuhiro ARIKAWA & Atsushi KATO, 2004. "Cross Shareholding and Initiative Effects," Discussion papers 04017, Research Institute of Economy, Trade and Industry (RIETI).
    6. Reynolds, Robert J. & Snapp, Bruce R., 1986. "The competitive effects of partial equity interests and joint ventures," International Journal of Industrial Organization, Elsevier, vol. 4(2), pages 141-153, June.
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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

    C71; Oligopolies; Partial cooperation; Shareholding interlocks; Antitrust threshold;
    All these keywords.

    JEL classification:

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

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