EFFECTS OF SYMMETRY ON GLOBALIZING SEPARATED MONOPOLIES TO A NASH-COURNOT OLIGOPOLY

Hisao Kameda () and Takashi Ui ()
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Hisao Kameda: Department of Computer Science, University of Tsukuba, Tsukuba Science city, Ibaraki 305-8573, Japan
Takashi Ui: Department of Economics, Hitotsubashi University, Kunitachi, Tokyo 186-8601, Japan

International Game Theory Review (IGTR), 2012, vol. 14, issue 02, 1-15

Abstract: The effects of uniting separated markets, each monopolized by a producer, into a globalized oligopolistic market, which is regarded as a noncooperative game, or as a Cournot oligopoly game, are investigated. The cases where such globalization degrades the profits of all producers coincidently, are examined. Linear demand and production functions are considered. It is shown that in complete symmetry, the degree of such coincident profit degradation is strongest (the worst-case ratio), where the degree means the most modest ratio of the profit degradation among all producers. The system is in complete symmetry when the values of parameters describing all producers and markets are identical. On the other hand, in producer symmetry, the degree of coincident consumer surplus improvement is highest (the best-case ratio), where the degree means the lowest of the ratios of consumer surplus improvement among all (previously separated) markets. The system is in producer symmetry when the values of parameters describing all producers are identical.

Keywords: Oligopoly; monopoly; Braess paradox; prisoners' dilemma; Nash equilibrium; producer profit; consumer surplus; Pareto inefficiency; 91A10; 78M50; 91B38 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2012
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0219198912500090

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