Characterization of Nash equilibria in Cournotian oligopolies with interdependent preferences

Marco Boretto, Fausto Cavalli and Ahmad Naimzada

No 463, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: We study the effects on the Nash equilibrium of the presence of a structure of social interdependent preferences in a Cournot oligopoly, described in terms of a game in which the network of interactions reflects on the utility functions of firms through a combination of weighted profits of their competitors as in [7]. Taking into account the channels of social and market interactions, we detail the consequence of preference interdependence on the best response of a firm, focusing on both direct and high degree of interdependence effects between two given firms. We characterize the Nash equilibrium in terms of social and market interactions among firms, through a Bonacich-like centrality measure and a scalar index describing the degree of competitiveness that characterizes an oligopoly with interdependent preferences. Finally, we study the equilibrium of some scenarios described by regular structures of interaction.

Keywords: Cournot Game; Preference interdependence; Nash Equilibrium (search for similar items in EconPapers)
JEL-codes: C62 C70 D43 (search for similar items in EconPapers)
Pages: 38
Date: 2021-03, Revised 2021-03
New Economics Papers: this item is included in nep-bec, nep-com, nep-gth, nep-ind, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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