TY - JOUR
AU - Leal-Coronado, Mariel A.
AU - García-Martínez, Arturo
AU - Kalashnikov, Vyacheslav V.
PY - 2016/11/14
Y2 - 2024/10/13
TI - Effects of Globalization under Consistent Conjectures
JF - International Journal of Combinatorial Optimization Problems and Informatics
JA - Int. Journal of COP and Infor.
VL - 7
IS - 3
SE - Articles
DO -
UR - https://www.ijcopi.org/ojs/article/view/27
SP - 62-74
AB - <p>We study the effects of merging two separate markets each originally monopolized by a producer into a globalized duopoly market. We consider a linear inverse demand with cap price and quadratic cost functions. After globalization, we find the consistent conjectural variations equilibrium (CCVE) of the duopoly game. Unlike in the Cournot equilibrium, a complete symmetry (identical cost functions parameters of both firms) does not imply the strongest coincident profit degradation. For the situation where both agents are low-marginal cost firms, we find that the company with a technical advantage over her rival has a better ratio of the current and previous profits.Moreover, as the rival becomes ever weaker, that is, as the slope of the rival’s marginal cost function increases, the profit ratio improves.</p>
ER -