On hierarchical competition in oligopoly
(2012) Journal of Economics — Vol. 107, n° 3, p. 217-237 (2012)
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- Abstract
- In this paper, we consider a hierarchical oligopoly model, in which firms compete on quantities of an homogeneous product. We provide a proof and an interpretation that under the three necessary and sufficient conditions of linear aggregate demand, constant and identical marginal costs, the strategy of leaders at any stage depends neither on the number of leaders who play after nor on the number of remaining stages. So, all firms behave as Cournotian oligopolists on the residual demand. We show that these three assumptions are not only sufficient but also necessary. Any departure from any of these assumptions rules out this property.
- Affiliations
Université de Bourgogne LEG Université de Paris Ouest-Nanterre-La Défense EconomiX ESCP Europe Department of Information and Operations Management
Citations
Ludovic, J., Musy, O., & Saïdi, A. W. (2012). On hierarchical competition in oligopoly. Journal of Economics, 107(3), 217-237. https://doi.org/10.1007/s00712-012-0286-4 (Original work published 2012)