Sustainable Oligopolies

Gabrielle Demange and Dominique Henriet

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Abstract: In this paper, we show that an oligopoly market where both increasing returns to scale and competition are present can nevertheless satisfy stability conditions. In a sustainable oligopoly (1) each consumer chooses the firm which proposes the price-quality schedule he prefers (2) firms earn non-negative profits (3) no new firm could attract consumers and make profits. We prove that such a sustainable oligopoly exists under rather weak assumptions. The results apply to most models of vertical or horizontal product differentiation or to models of quality differentiation due to congestion effects.

Keywords: Rent sharing; Private vs public ownership; Panel data (search for similar items in EconPapers)
Date: 1991-08
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Citations: View citations in EconPapers (4)

Published in Journal of Economic Theory, 1991, 54 (2), pp.417-428

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Journal Article: Sustainable oligopolies (1991)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00670928

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