Note on Cost Arrangement and Market Performance in a Multi-Product Cournot Oligopoly, A

Harvey E. Lapan and David A. Hennessy

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: Model invariances have been used extensively to understand welfare and conduct consequences of firm heterogeneity in a one-product Cournot oligopoly. Nothing is known about the richer and more realistic context of firm heterogeneity in multi-product Cournot oligopoly. In this note, welfare in a two-product Cournot oligopoly is shown to increase (decrease) with an increase in correlation between unit costs when the outputs complement (substitute) in demand. A more qualified correlation structure is required for the result to apply in a three-product Cournot oligopoly when products complement in demand.

Keywords: Arrangement increasing; Complementarity; Invariance (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
Date: Written

Published in International Journal of Industrial Organization, May 2006, Vol. 24, No. 3, pp. 583-591.

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Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:12720

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