Imitation in Cournot oligopolies with multiple markets

Jonas Hedlund ()

Economic Theory, 2015, vol. 60, issue 3, 567-587

Abstract: This paper analyzes imitation dynamics in Cournot oligopolies when firms imitate both rivaling firms and firms in other markets. The resulting tension between relative and absolute performance leads to a unique prediction strictly between the Nash equilibrium and perfectly competitive outcomes, which is fully characterized by a simple formula. The outcome becomes less competitive as the number of markets increases, i.e., as firms receive more information about firms in other markets. A link with relative payoff maximization is provided. An extension of the benchmark model reveals that sophisticated firms imitating across asymmetric markets converge to a related but somewhat less competitive outcome. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Evolution; Imitation; Oligopoly; Stochastic stability; C72; C73; D43 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s00199-015-0878-7

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