Journal of Evolutionary Economics

, Volume 27, Issue 5, pp 989–1005 | Cite as

Extended oligopolies with contingent workforce

Regular Article
  • 114 Downloads

Abstract

In the oligopoly literature, the introduction of modified cost functions has added reality into the classical analysis. In particular, some recent contributions analyzed oligopoly dynamics when considering production adjustment costs. Although this is a step in building more realistic models, adjustment costs may be different depending on the adjustment direction. In fact, when quantity decreases, firms may decide to lay off workers; by contrast, when quantity increases, new workers need to be hired and this entails searching and selection costs. In this paper, dynamic single-product oligopolies without product differentiation are first examined and then we study how this dynamic is affected by the additional adjustment costs. The resulting dynamic is complex and the consequences of this complexity are examined in terms of policy making.

Keywords

Oligopolies Repeated games Complex dynamics 

JEL Classification

C72 C73 

Notes

Compliance with Ethical Standards

Author Akio Matsumoto has received research grants from the MEXT-Supported Program for the Strategic Research Foundation at Private Universities 2013-2017 and Chuo University (Joint Research Grant). The other authors declare that they have no conflict of interest.

References

  1. Bischi G-I, Chiarella C, Kopel M, Szidarovszky F (2010) Nonlinear Oligopolies: Stability and Bifurcations. Springer-Verlag, Berlin/New YorkCrossRefGoogle Scholar
  2. Burr C, Gardini L, Szidarovszky F (2015) Discrete time dynamic oligopolies with adjustment constraints. Journal of Dynamics and Games 2(1):65–87CrossRefGoogle Scholar
  3. Chavas J-P, Holt MT (1993) Market instability and nonlinear dynamics. Am J Agric Econ 75(1):113–120CrossRefGoogle Scholar
  4. Cournot A (1838) Recherches sur les Principes Mathematiques de la Theorie des Richesses. Hachette. English translation (1960), Kelly, New York, NYGoogle Scholar
  5. Driskill RA, McCafferty S (1989) Dynamic oligopoly with adjustment costs: a differential game approach. J Econ Theory 49:324–338CrossRefGoogle Scholar
  6. Hill EJ, Hawkins AJ, Ferris M, Weitzman M (2001) Finding an extra day a week: the positive influence of perceived job flexibility on work and family life balance. Fam Relat 50(1):49–58CrossRefGoogle Scholar
  7. Hovenkamp H (2005) Federal Antitrust Policy. West Group, St. Paul, MN, 2nd ednGoogle Scholar
  8. Howroyd TD, Rickard JA (1981) Cournot oligopoly and adjustment costs. Econ Lett 7:113–117CrossRefGoogle Scholar
  9. MacLeod WB (1985) On adjustment costs and the stability of equilibria. Rev. Econ. Stud. 52:575–591CrossRefGoogle Scholar
  10. Matsumoto A, Merlone U, Szidarovszky F (2008) Cartelizing groups in dynamic linear oligopoly with antitrust threshold. International Game Theory Review 10(4):399–419CrossRefGoogle Scholar
  11. Matsumoto A, Merlone U, Szidarovszky F (2010a) Cartelising groups in dynamic hyperbolic oligopoly with antitrust threshold. Aust Econ Pap 49(4):289–300CrossRefGoogle Scholar
  12. Matsumoto A, Merlone U, Szidarovszky F (2010b) Dynamic oligopoly with partial cooperation and antitrust threshold. J Econ Behav Organ 73:259–272CrossRefGoogle Scholar
  13. Matsumoto A, Merlone U, Szidarovszky F (2015) Oligopolies with contingent workforce and unemployment insurance systems. Commun Nonlinear Sci Numer Simul 27:52–65CrossRefGoogle Scholar
  14. Matusik SF, Hill CWL (1998) The utilization of contingent work, knowledge creation, and competitive advantage. Acad Manag Rev 23(4):680–697CrossRefGoogle Scholar
  15. Merlone U, Szidarovszky F (2015) Dynamic oligopolies with contingent workforce and investment costs. Math Comput Simul 108:144–154CrossRefGoogle Scholar
  16. Merlone U, Sonnessa M, Terna P (2008) Horizontal and vertical multiple implementations in a model of industrial districts. Journal of Artificial Societies and Social Simulations 11(2)Google Scholar
  17. Miller R, Hobday M, Leroux-Demers T, Olleros X (1995) Innovation in complex systems industries: The case of flight simulation. Ind Corp Chang 4(2):363–400CrossRefGoogle Scholar
  18. Okuguchi K (1976) Expectations and Stability in Oligopoly Models. Springer-Verlag, Berlin HeidelbergsCrossRefGoogle Scholar
  19. Okuguchi K, Szidarovszky F (1999) The Theory of Oligopoly with Multi-product Firms. Springer-Verlag, Berlin HeidelbergCrossRefGoogle Scholar
  20. Reynolds SS (1987) Capacity investment, preemption and commitment in an infinite horizon model. Int Econ Rev 28:69–88CrossRefGoogle Scholar
  21. Reynolds SS (1991) Dynamic oligopoly with capacity adjustment costs. J Econ Dyn Control 15:491–514CrossRefGoogle Scholar
  22. Sterman JD (2000) Business Dynamics. System Thinking and Modeling for a Complex World. Irwin McGraw-Hill, Boston MAGoogle Scholar
  23. Szidarovszky F, Yen J (1995) Dynamic Cournot oligopoly with production adjustment costs. J Math Econ 24:95–101CrossRefGoogle Scholar
  24. The Council of Economic Advisers (2014) Work-life balance and the economics of workplace flexibility. https://www.whitehouse.gov/sites/default/files/docs/updated_workplace_flex_report_final_0.pdf. Accessed: 2016-06-06
  25. U.S. Bureau of Labor Statistics (2005) Contingent and alternative employment arrangements. http://data.bls.gov/news.release/conemp.nr0.htm
  26. Zhao J, Szidarovszky F (2008) N-firm oligopolies with production adjustment costs: best responses and equilibrium. J Econ Behav Organ 68:87–99CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.Department of EconomicsChuo UniversityHachioji, TokyoJapan
  2. 2.Department of Psychology, Center for Cognitive Science, via Verdi 10University of TorinoTorinoItaly
  3. 3.Department of Applied MathematicsUniversity of PécsPécsHungary

Personalised recommendations