Dynamic Cooperative Oligopolies

Ferenc Szidarovszky () and Akio Matsumoto
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Ferenc Szidarovszky: Department of Mathematics, Corvinus University, Fövám tér 8, 1093 Budapest, Hungary
Akio Matsumoto: Department of Economics, Chuo University, 742-1, Higashi-Nakano, Hachioji 192-0393, Japan

Mathematics, 2024, vol. 12, issue 6, 1-12

Abstract: An n -person cooperative oligopoly is considered without product differentiation. It is assumed that the firms know the unit price function but have no access to the cost functions of the competitors. From market data, they have information about the industry output. The firms want to find the output levels that guarantee maximum industry profit. First, the existence of a unique maximizer is proven, which the firms cannot determine directly because of the lack of the knowledge of the cost functions. Instead, a dynamic model is constructed, which is asymptotically stable under realistic conditions, and the state trajectories converge to the optimum output levels of the firms. Three models are constructed: first, no time delay is assumed; second, information delay is considered for the firms on the industry output; and third, in addition, information delay is also assumed about the firms’ own output levels. The stability of the resulting no-delay, one-delay, and two-delay dynamics is examined.

Keywords: cooperative game; oligopolies; asymptotic stability; time delays; Hopf bifurcation; stability switching curve (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
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