We introduce a simple model of oligopolistic competition where firms first build capacity, and then, after observing the capacity decisions, choose a reservation price at which they are willing to supply their capacities. This model describes many markets more realistically than the model of Kreps and Scheinkman [Kreps, D., Scheinkman, J., 1983. Quantity precommitment and Bertrand competition y...

An adaptive oligopoly model, where the demand function is isoelastic and the competitors operate under constant marginal costs, is considered. The Cournot equilibrium point then loses stability through a subcritical Neimark bifurcation. The present paper focuses some global bifurcations, which precede the Neimark bifurcation, and produce other attractors which coexist with the still attractive ...

We estimate market power in California's thin water market. Market frictions may distort the potential welfare gains from marketing. use a Nash-Cournot model and derive closed-form solution for extent of typical setting. then this to newly assembled dataset on economy. show that, under assumptions Cournot model, is limited.

Models formulated as complementarity problems have been applied previously to assess the potential for market power in transmission-constrained electricity markets. Here, we use the complementarity approach to simulate the interaction of pollution permit markets with electricity markets, considering forward contracts and the operating reserve market. Because some power producers are relatively ...

Most existing Nash-Cournot models of competition among electricity generators assume that firms behave purely Cournot or Bertrand with respect to transmission decisions by the independent system operator. Such models are unrealistic for markets in which interfaces connecting subnetworks are frequently saturated but the congestion pattern within individual subnetworks is less predictable. We pro...

In this paper, we respecify à la Cournot-Walras the mixed version of a model of noncooperative exchange, originally proposed by Lloyd S. Shapley. We first show that this respecification has a Cournot-Walras equilibrium allocation, which does not correspond to any CournotNash equilibrium of the mixed version of the original Shapley’s model. As this is due to the intrinsic two-stage nature of the...

In this article we revisit the classic comparison between Bertrand and Cournot competition in the presence of a cartel of firms that faces outsiders acting individually. This competition setting enables to deal with both non-cooperative and cooperative oligopoly games. We concentrate on industries consisting of symmetrically differentiated products where firms operate at a constant and identica...

Vega-Redondo (1997) showed that imitation leads to the Walrasian outcome in Cournot Oligopoly. We generalize his result to aggregative quasi-submodular games. Examples are the Cournot Oligopoly, Bertrand games with differentiated complementary products, CommonPool Resource games, Rent-Seeking games and generalized Nash-Demand games. JEL-Classifications: C72, D21, D43, L13.