TY - JOUR

T1 - Mixed oligopoly

T2 - Analysis of consistent equilibria

AU - Kalashnikov, Vyacheslav V.

AU - Bulavsky, Vladimir A.

AU - Kalashnykova, Nataliya I.

AU - Watada, Junzo

AU - Hernández-Rodríguez, Diego De Jesús

PY - 2014/11/1

Y1 - 2014/11/1

N2 - In this paper, a model of mixed oligopoly with conjectured variations equilibrium (CVE) is examined, in which one of the agents maximizes a convex combination of its net profit with the domestic social surplus. The agents' conjectures concern the price variations, which depend on the variations in their production outputs. Using the established existence and uniqueness results for the CVE (the exterior equilibrium ) for any fixed set of feasible conjectures, the notion of the interior equilibrium is introduced by developing a conjecture consistency criterion. Then, the existence theoremfor the interior equilibrium (defined as a CVE state with consistent conjectures ) is proven. When the convex combination coefficient tends to 1 (thus transforming the model into the mixed oligopoly in its extreme form), two trends are apparent. First, for private companies, the equilibrium with consistent conjectures becomes more proficient than the Cournot-Nash equilibrium. Second, there exists a (unique) value of the convex combination coefficient such that the private agent's aggregate profit is the same in both the above-mentioned equilibria, which makes subsidies to producers or consumers unnecessary.

AB - In this paper, a model of mixed oligopoly with conjectured variations equilibrium (CVE) is examined, in which one of the agents maximizes a convex combination of its net profit with the domestic social surplus. The agents' conjectures concern the price variations, which depend on the variations in their production outputs. Using the established existence and uniqueness results for the CVE (the exterior equilibrium ) for any fixed set of feasible conjectures, the notion of the interior equilibrium is introduced by developing a conjecture consistency criterion. Then, the existence theoremfor the interior equilibrium (defined as a CVE state with consistent conjectures ) is proven. When the convex combination coefficient tends to 1 (thus transforming the model into the mixed oligopoly in its extreme form), two trends are apparent. First, for private companies, the equilibrium with consistent conjectures becomes more proficient than the Cournot-Nash equilibrium. Second, there exists a (unique) value of the convex combination coefficient such that the private agent's aggregate profit is the same in both the above-mentioned equilibria, which makes subsidies to producers or consumers unnecessary.

KW - Equilibrium theory

KW - Game theory

KW - Management engineering

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M3 - Article

AN - SCOPUS:84912136499

SN - 1343-0130

VL - 18

SP - 971

EP - 984

JO - Journal of Advanced Computational Intelligence and Intelligent Informatics

JF - Journal of Advanced Computational Intelligence and Intelligent Informatics

IS - 6

ER -