Successive Oligopolies in a Pure Exchange Economy
DOI:
https://doi.org/10.6000/1929-7092.2012.01.13Keywords:
Successive oligopolies, bilateral oligopoly, non-trivial equilibrium, comparative staticsAbstract
Abstract: In this paper we assume a market structure in which there are whole-sellers, retailers and consumers. The product sold to the consumers is initially endowed with the whole-sellers. The whole-sellers value both the product and money. The retailers are not endowed with anything at all. The retailers submit bids in units of money to the whole-sellers from the revenue earned by selling the product to the consumers. The whole-sellers offer the product to the retailers who in turn sell it to the consumers. The retailers care only for money.
In this model there is a trivial equilibrium with no bids or offers being submitted. In addition we establish that a unique non-trivial equilibrium exists in which every trader participates in the market. Further, such an equilibrium is symmetric- all whole-sellers offer the same quantity of the product and all retailers bid the same quantity of money. We also obtain some comparative static results.
References
http://dx.doi.org/10.1016/j.geb.2007.09.002
Gabszewicz, Jean J., Didier Laussel, Tanguy van Ypersele, and Skerdilajda Zanaj. 2007. “Market games and successive oligopolies”, Ecore Discussion Paper, 2007/10.
Gabszewicz, Jean J., and Philippe Michel. 1997. “Oligopoly equilibrium in exchange economies”, in B.C. Eaton and R. G. Harris, (Eds.) Trade, technology and economics: Essays in honor of Richard G. Lipsey, Elgar, Cheltenham, UK.
Gabszewicz, Jean J., and Skerdilajda Zanaj. 2011. “Free entry in successive oligopolies”, International Journal of Economic Theory, 7: 179-188.
http://dx.doi.org/10.1111/j.1742-7363.2011.00157.x
Shapley, Lloyd S. 1976. “Non-cooperative general exchange”, in S.A.Y. Lin (ed.), Theory of measurement of economic externalities, Academic Press, New York.
Shapley, Lloyd S., and Martin Shubik 1977. “Trade using one commodity as a means of payment”, Journal of Political Economy, 85: 937-968.
http://dx.doi.org/10.1086/260616
Shubik Martin 1973. “Commodity money, oligopoly, credit and bankruptcy in a general equilibrium model”, Western Economic Journal, 11: 24-38.
Downloads
Published
How to Cite
Issue
Section
License
Policy for Journals/Articles with Open Access
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are permitted and encouraged to post links to their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work
Policy for Journals / Manuscript with Paid Access
Authors who publish with this journal agree to the following terms:
- Publisher retain copyright .
- Authors are permitted and encouraged to post links to their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work .
