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Luis Carlos Corchon Diaz (Universidad Carlos III de Madrid)

Publié le 7 mai 2018 Mis à jour le 15 juin 2018
Date
Le 15 mai 2018 De 12:30 à 13:15

Oligopolistic Equilibrium and Financial Constraints (joint with Carmen Bevia and Yosuke Yasuda)


Luis Carlos Corchon Diaz
, Professeur Department of Economics, Universidad Carlos III de Madrid.

 Abstract: We model a dynamic duopoly in which firms can potentially drive their rivals from the market (bankrupt them). A consequence is that, for some range of parameters, the static Cournot equilibrium outcome cannot be sustained in an infinitely dynamic setting. In those cases, there is a Markov perfect equilibrium in mixed strategies in which one firm will eventually be driven from the market with probability one. We consider the consequences of potentially bankruptcy on the set of outcomes supportable via tacit collusion, showing the set can be different than in the absence of bankruptcy in the following ways: . ........The consequences for welfare and consumer surplus are .....................