On the Profitability of Production Constraints in a Dynamic Natural Resource Oligopoly

Hassan Benchekroun and Gérard Gaudet

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: Static oligopoly analysis predicts that if a single firm in Cournot equilibrium were to be constrained to contract its production marginally, its profits would fall. on the other hand, if all the firms were simultaneously constrained to reduce their productino, thus moving the industry towards monopoly output, each firm's profit would rise. We show that these very intuitive results may not hold in a dynamic oligopoly.

JEL-codes: L10 (search for similar items in EconPapers)
Pages: 20 pages
Date: 1997
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Related works:
Journal Article: On the profitability of production perturbations in a dynamic natural resource oligopoly (2003)
Working Paper: On the Profitability of Production Constraints in a Dynamic Natural Resource Oligopoly (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:9717

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