Models of Oligopoly
As an example of an important complementarity problem, a model of an oligopolistic market with a homogeneous product is examined in this chapter. In Section 4.2, a generalized Cournot model is introduced. Each subject of the model uses a conjecture about the market response to variations of its production volume. The conjecture value depends upon both the current total volume of production at the market and the subject’s contribution into it. Under general enough assumptions, the equilibrium existence and uniqueness theorems are proven. When analyzing the network equilibrium model, the topological degree theory is used to prove the existence theorem.
KeywordsVariational Inequality Complementarity Problem Migration Cost Inverse Demand Function Order Optimality Condition
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