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Existence and optimality of oligopoly equilibria in linear exchange economies

Abstract : We consider a linear exchange economy and its successive replicas. We study the notion of Cournot-Walras equilibrium in which the consumers use the quantities of commodities put on the market as strategic variables. We prove that, generically, if the number of replications is large enough but finite, the competitive behaviour is an oligopoly equilibrium. Then, under a mild condition, which may be interpreted in terms of market regulation and/or market activity, we show that any sequence of oligopoly equilibria of successive replica economies converges to the Walrasian outcome and furthermore that every oligopoly equilibrium of large, but finite, replica is Pareto optimal. Consequently, under the same assumptions on the fundamentals of the economy, one has an asymptotic result on the convergence of oligopoly equilibria to the Walras equilibrium together with a generic existence result for the Cournot-Walras.
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https://halshs.archives-ouvertes.fr/halshs-00265698
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Submitted on : Wednesday, March 19, 2008 - 10:20:59 PM
Last modification on : Tuesday, January 19, 2021 - 11:08:07 AM

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Jean-Marc Bonnisseau, Michael Florig. Existence and optimality of oligopoly equilibria in linear exchange economies. Economic Theory, Springer Verlag, 2003, 22 (4), pp.727-741. ⟨10.1007/s00199-003-0363-6⟩. ⟨halshs-00265698⟩

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