Multi-market Oligopoly of Equal Capacity

Ruda Zhang and Roger Ghanem

Papers from arXiv.org

Abstract: We consider a variant of Cournot competition, where multiple firms allocate the same amount of resource across multiple markets. We prove that the game has a unique pure-strategy Nash equilibrium (NE), which is symmetric and is characterized by the maximal point of a "potential function". The NE is globally asymptotically stable under the gradient adjustment process, and is not socially optimal in general. An application is in transportation, where drivers allocate time over a street network.

Date: 2020-12
New Economics Papers: this item is included in nep-com, nep-cwa, nep-gth and nep-ind
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