The Incentives for Takeover in Oligopoly* by Roman Inderst and Christian Wey This paper presents a model of takeover incentives in an oligopolistic industry, which, in contrast to previous approaches, takes both insiders' and outsiders' gains from an increase in industry concentration into account. Our main application is to compare takeover incentives in a differentiated Cournot and Bertrand o...

This paper compares Bertrand and Cournot equilibria in a differentiated duopoly with substitute goods and product R&D. I find that R&D expenditure, prices and firms’ net profits are always higher under quantity competition than under price competition. Furthermore, output, consumer surplus and total welfare are higher in the Bertrand equilibrium than in the Cournot equilibrium if either R&D spi...

We consider a Cournot oligopoly model where multiple suppliers (oligopolists) compete by choosing quantities. We compare the aggregate profit achieved at a Cournot equilibrium to the maximum possible, which would be obtained if the suppliers were to collude. We establish a lower bound on the profit of Cournot equilibria in terms of a scalar parameter derived from the inverse demand function and...

In a recent paper Bagwell (1995) pointed out that only the Cournot outcome, but not the Stackelberg outcome, can be supported by a pure Nash equilibrium when actions of the Stackelberg leader are observed with the slightest error. The Stackelberg outcome, however, remains close to the outcome of a mixed equilibrium. We compare the predictions in various classes of evolutionary and learning proc...

We characterize equilibria of oligopolistic markets where identical firms with constant marginal cost compete à la Cournot. For given maximal willingness to pay and total demand, we first identify all combinations equilibrium consumer surplus industry profit that can arise from arbitrary demand functions. Then, as a further restriction, fix the average above (i.e., first‐best surplus) possible ...