Competition within and Between Groups of Firms

Claude d’Aspremont () and Rodolphe Dos Santos Ferreira
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Claude d’Aspremont: Université Catholique de Louvain

Chapter Chapter 3 in The Economics of Competition, Collusion and In-between, 2021, pp 79-113 from Springer

Abstract: Abstract In this chapter, we subdivide the oligopolistic sector into several separable groups and adapt our concept of oligopolistic equilibrium by simplifying accordingly both the market share and the market size constraints. In the following we introduce another path to further simplify firms’ conjectures: each firm anticipates the income to be spent in its group as if all groups were independent. Then, we further exploit the subdivision into groups by restricting our analysis to the limit case where perfect substitutability holds within each group. Assuming Cournot competition within each group leads to the concept of Cournotian monopolistic competition equilibrium. Through an example and a simple existence proposition, we show that this concept is less demanding than the Cournot-Walras equilibrium concept. In the last section, we present an empirical application to an industry divided into two groups, a dominant group and a competitive fringe, and, finally, examine in a theoretical example the limit of collusion.

Keywords: Multi-product separability; Cournot-Walras equilibrium; Cournotian monopolistic competition; Empirical industrial organisation (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-63602-9_3

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DOI: 10.1007/978-3-030-63602-9_3

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