CONSISTENT POLICY RULES AND THE BENEFITS OF MARKET POWER

Larry Karp

No 269994, 1987 Annual Meeting, August 2-5, East Lansing, Michigan from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: A simple method of obtaining subgame-perfect feedback policy rules in a rational expectations environment is applied to the problems of a durablegoods monopolist and of a monopolist facing a dynamic competitive fringe. The resulting equilibrium trajectories illustrate a sufficient condition for potential market power to be advantageous. Numerous examples suggest that, in situations where this sufficient condition is not satisfied, it is possible to find parameterizations of taste and technology such that market power is disadvantageous.

Keywords: Agricultural and Food Policy; Marketing (search for similar items in EconPapers)
Pages: 30
Date: 1987-08-02
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea87:269994

DOI: 10.22004/ag.econ.269994

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