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

H. Benchkeroun and Gérard Gaudet

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

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.

Keywords: OLIGOPOLIES (search for similar items in EconPapers)
JEL-codes: L10 (search for similar items in EconPapers)
Pages: 20 pages
Date: 1997
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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:montec:9717

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