Note on Oligopoly: Rival Behavior and Efficiency

Michael Jones

Bell Journal of Economics, 1980, vol. 11, issue 2, 709-714

Abstract: This paper explores the relationship between the maximum solution and Nash equilibrium of "rival" oligopolists and the competitive equilibrium of profit maximizers. There is no presumption that quantity-setting oligopolists who attempt to achieve profits that exceed the industry average will produce an industry output below the efficient level; and in the special case of identical firms, maximin behavior or rival firms yields a Nash equilibrium and replicates the outcomes of pure competition.

Date: 1980
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