The Economics of Competition, Collusion and In-between

This book provides a methodology for the analysis of oligopolistic markets from an equilibrium viewpoint, considering competition within and between groups of firms. It proposes a well-founded measure of competitive toughness that can be used in empirically relevant applications. This measure reflects the weight put by each firm on competition for market share relative to competition for market size two dimensions of competition involving conflicting and convergent interests, respectively. It further explores several applications, such as the effect of tougher competition on innovation and of output market power on the emergence of involuntary unemployment, as well as the importance of strategic interactions for investment decisions.

Relative to the dominant model of monopolistic competition, The Economics of Competition, Collusion and In-between aims to explore an alternative tractable model of firm competition opening the application of oligopoly theory to many fields in economics where general equilibrium features are crucial. It will be relevant to those interested in applied industrial organization, trade, macroeconomics (in particular macrodynamics) and quantitative economics.

Introduces a comprehensive model of firm oligopolistic behaviour, with price-quantity competition, nesting a multiplicity of competition regimes, with conduct parameters varying continuously between tacit collusion and cutthroat competition Provides an approach by which to empirically measure market power, using a tractable framework that is parsimonious in the parameter space Extends the potential applications (in IO, Trade and Macro) and reinforces the general equilibrium dimension of Dixit-Stiglitz (1977) seminal model by assuming non-negligible firms (and hence non-negligible intersectoral effects) and by further exploiting separability with one or more groups of firms

Autorentext

Claude d'Aspremont is Emeritus Professor in Economics, member and Past-President of the Center for Operations Research and Econometrics (CORE) at the Université Catholique de Louvain (UCL), Belgium. He was awarded the Francqui Prize 1995.

Rodolphe Dos Santos Ferreira is Emeritus Professor in Economics at the University of Strasbourg, France, working at the Bureau d'Economie Théorique et Appliquée (BETA), of which he was co-director (1979-1992). He is also a part-time member of Católica Lisbon School of Business and Economics, Portugal. He is a honorary senior member of the Institut Universitaire de France.

Inhalt

`Chapter 1: Modelling the intensity of competition.- Chapter 2: Competition for Market share and for market size.- Chapter 3: Competition within and between groups of firms.- Chapter 4: Extensions.