Dynamics of Industrial Oligopoly Market Involving Capacity Limits and Recurrent Investment

Anastasiia Panchuk ()
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Anastasiia Panchuk: NAS of Ukraine

A chapter in Complexity and Geographical Economics, 2015, pp 249-275 from Springer

Abstract: Abstract In the current chapter we investigate an industrial oligopoly market, modelled by using CES production functions in combination with the isoelastic demand function. It is supposed that the competitors act not under constant, but eventually decaying returns, and thus, from time to time they need to renew their capital equipment, choosing its optimal amount according to the current market situation. Meanwhile, in the intervening periods the firms are subjected to capacity limits due to fixed capital stocks. As a result, the evolution of the system derived depends essentially on the number of competitors and the capital lifetime, and is also sensitive to the initial choice of individual inactivity times. In particular, the firms may merge into different groups renewing their capitals simultaneously, which leads to distinct dynamical patterns.

Keywords: Capital Stock; Constant Return; Reaction Function; Cournot Equilibrium; Perfect Competition (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:dymchp:978-3-319-12805-4_10

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DOI: 10.1007/978-3-319-12805-4_10

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