EconPapers    
Economics at your fingertips  
 

Relative profit maximization in asymmetric oligopoly

Atsuhiro Satoh () and Yasuhito Tanaka ()

Economics Bulletin, 2014, vol. 34, issue 3, 1653-1664

Abstract: We analyze Bertrand and Cournot equilibria in an asymmetric oligopoly in which the firms produce differentiated substitutable goods and seek to maximize their relative profits instead of their absolute profits. Assuming linear demand functions and constant marginal costs we show the following results. If the marginal cost of a firm is lower (higher) than the average marginal cost over the industry, its output at the Bertrand equilibrium is larger (smaller) than that at the Cournot equilibrium, and the price of its good at the Bertrand equilibrium is lower (higher) than that at the Cournot equilibrium.

Keywords: relative profit maximization; asymmetric oligopoly; Cournot and Bertrand equilibria (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2014-07-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20) Track citations by RSS feed

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I3-P150.pdf (application/pdf)

Related works:
Working Paper: Relative profit maximization in asymmetric oligopoly (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-13-00828

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().

 
Page updated 2019-04-21
Handle: RePEc:ebl:ecbull:eb-13-00828