Indeterminate Output Allocations in Collusive Equilibria and Multi-plant Firms

Thomas Mitchell
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Thomas Mitchell: S. Illinois Univ. at Carbondale

Microeconomics from EconWPA

Abstract: If n colluding oligopolists all have the cost function C(q_i) = c * q_i, then it will not be possible to uniquely allocate among the firms the monopoly output that maximizes their joint profit. Similarly, if all plants of an n-plant firm have the cost function C(q_i) = c * q_i, then it will not be possible to uniquely allocate the firm's optimal output among the n plants. This paper identifies the necessary and sufficient conditions for such "allocative indeterminacies" to occur (i.e., the conditions to be avoided).

Keywords: production theory; functional forms; ind. org. (search for similar items in EconPapers)
JEL-codes: D1 D2 D3 D4 (search for similar items in EconPapers)
Date: 1995-07-25
Note: Type of Document - LaTeX (2.09); prepared on IBM PC; to print on HP LaserJet III (1Mb); pages: 9; figures: none. Only file FTP'ed is the TeX input file. With your Web browser, visit SIUC's Working Paper
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpmi:9507001

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