Existence and optimality of oligopoly equilibria in linear exchange economies

Jean-Marc Bonnisseau and Michael Florig ()
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Michael Florig: CERMSEM - CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We consider a linear exchange economy and its successive replicas. We study the notion of Cournot-Walras equilibrium in which the consumers use the quantities of commodities put on the market as strategic variables. We prove that, generically, if the number of replications is large enough but finite, the competitive behaviour is an oligopoly equilibrium. Then, under a mild condition, which may be interpreted in terms of market regulation and/or market activity, we show that any sequence of oligopoly equilibria of successive replica economies converges to the Walrasian outcome and furthermore that every oligopoly equilibrium of large, but finite, replica is Pareto optimal. Consequently, under the same assumptions on the fundamentals of the economy, one has an asymptotic result on the convergence of oligopoly equilibria to the Walras equilibrium together with a generic existence result for the Cournot-Walras.

Keywords: Imperfect competition; Oligopoly equilibrium; Pareto optimum; Linear utility functions; Replication.; Replication (search for similar items in EconPapers)
Date: 2003
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Published in Economic Theory, 2003, 22 (4), pp.727-741. ⟨10.1007/s00199-003-0363-6⟩

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Journal Article: Existence and optimality of oligopoly equilibria in linear exchange economies (2003)
Working Paper: Existence and optimality of oligopoly equilibria in linear exchange economies (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00265698

DOI: 10.1007/s00199-003-0363-6

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