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This paper investigates a duopoly game model in which two labor-managed firms compete in quantities. The game proceeds as follows. In the first stage, each labor-managed firm independently and simultaneously chooses the corporate social responsibility (CSR) level. In the second stage, each labor-managed firm independently and simultaneously chooses whether or not to offer the wage-rise contract policy (WRCP) as a strategic commitment device. If a labor-managed firm offers WRCP, it decides an output level and a wage premium rate. In addition, the labor-managed firm agrees to pay each employee a wage premium uniformly, provided that it actually produces more than the chosen output. At the end of the game, each labor-managed firm independently and simultaneously chooses an actual output. First, the paper examines the reaction functions of labor-managed firms in the model and shows that the reaction functions of labor-managed firms are upward-sloping. Next, this paper discusses the equilibrium of the model and shows that there is an equilibrium in which each labor-managed firm does not use CSR as a business strategy.

Digital transformation plays an important role in improving the efficiency of production of enterprises and can provide strong support for green and sustainable development. Compared with domestic enterprises, outward foreign direct investment (OFDI) enterprises have greater access to advanced digital technology. This paper aims to analyze the path selection of green and sustainable production for the digital transformation of manufacturing outward foreign direct investment (OFDI) companies, whether gradual or leapfrogging. However, there is a lack of systemic game mechanisms and numerical simulation methods for heterogeneous enterprises. Based on the analysis of reverse technology spillover intensity of outward foreign direct investment (OFDI) and differences in the absorptive capacity of enterprises, we have proposed the evolutionary game model for different path selection of digital transformation of manufacturing enterprises, due to heterogeneous enterprises under different spillover degrees with numerical analysis methods. The research results show that: (i) Under low reverse technology spillover intensity, all enterprises evolve to a gradual transformation path, and enterprises with weaker absorptive capacity converge faster; (ii) There is a certain threshold for reverse technology spillover. When reverse technology spillover intensity exceeds the threshold, enterprises with stronger absorptive capacity converge to a leapfrog transformation path, but enterprises with weak absorptive capacity converge to a gradual transformation path; (iii) With high reverse technology spillover intensity, all enterprises evolve toward a leapfrog transformation path, and faster convergence happens to enterprises with higher absorptive capacity. The evolutionary game path of digital transformation in manufacturing enterprises is illustrated in Fig. 1.

Price competition is more intense than quantity competition in private oligopolies, wherein all firms are profit maximizers. However, in mixed oligopolies where one state‐owned public firm competes with profit‐maximizing private firms, price competition may not result in tougher competition than quantity competition. In this study, we introduce common ownership, a distinct feature of recent financial markets, into a mixed oligopoly model and investigate how common ownership affects this ranking. We show that under common ownership, quantity competition is likely to be tougher than price competition. Moreover, we find that common ownership harms welfare regardless of the competition mode. Common ownership enhances private firms' profits under Bertrand competition while these may decline under Cournot competition. [ABSTRACT FROM AUTHOR]

This paper examines an oligopoly game model with a concave demand function where labor-managed firms compete in quantities with each other. There is no possibility of entry or exit. The timing of the game is as follows. In the first stage, each labor-managed firm simultaneously and independently chooses the level of social concern. In the second stage, each labor-managed firm simultaneously and independently chooses whether to offer lifetime employment as a strategic commitment device. In the third stage, quantity competition takes place. This paper examines the reaction functions of labor-managed firms in the model. First, the paper presents the reaction functions of labor-managed firms in the game model. It is shown that the reaction functions of labor-managed firms have both upward and downward sloping cases. Next, the paper provides a simple example to support the above result. This example shows a case in which the reaction functions of labor-managed firms are downward-sloping.

Copyright of Electric Drive is the property of Electric Drive Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

To reduce carbon emissions in the electric vehicle (EV) market, the Chinese government has issued a subsidy scheme involving a subsidy threshold that is quite different from the fixed subsidy. This study aims to investigate competing EV manufacturers' decisions on carbon-reduction (CR) technology investment under the subsidy threshold. We construct a Cournot game model involving two competitive EV manufacturers. The results show that decisions of the two EV manufacturers on investing in CR technology vary under different subsidy thresholds. Particularly, they would make the same investment decisions when the subsidy threshold is low or large, but achieve the opposite investment decisions when the subsidy threshold is intermediate. In the benchmark model where there is only one EV manufacturer, an EV manufacturer could always increase its profit from investing in CR technology when the subsidy threshold is low. In the Cournot model where there are two competing manufacturers, however, they may get involved in the Prisoner's Dilemma and both manufacturers could suffer economic losses from CR technology investment. [ABSTRACT FROM AUTHOR]

This paper investigates a Cournot game model with a nonlinear demand function where a profit-maximizing firm competes against a socially concerned firm. The timing of the game is as follows. In stage one, each firm non-cooperatively decides whether to offer a wage-rise contract policy (WRCP) as a strategic commitment device. In stage two, after observing the rival’s decision in stage one, each firm non-cooperatively chooses its actual output. This paper presents the equilibrium solutions of the model.

Theory of the games offers perfect tools for modelling imperfect competition specific processes, manifested in relation with product quantity (Cournot/Stackelberg type), product price (Bertrand type) or quality. The equilibrium solution in terms of output is highlighted in a Cournot situation, whilst the price equilibrium solution can be revealed in a Bertrand scenario. Despite the different strategy type based on, the common denominator of these two models is given by the fact that strategic choices are made simultaneously. The Stackelberg model instead, represents a perfect information sequential game – firms advocating for quantity competition – having both theoretical and practical applicability. In the simplest possible case, with two players moving in two stages, the leader will always choose a certain output level, and the follower observes this decision and then establish his action path accordingly. Present paper’s main goal is to analyze a duopoly market with players adopting a Stackelberg behavior. Regardless the analyzed scenario, both firms are expected to survive and a stable equilibrium will manifest (the Subgame Perfect Equilibrium). The price will be invariable at market demand curve slope, whilst player’s choosed quantities and also gained profits level will be in an inverse dependence relation with it. The leader’s chosen output and also registered profit levels will be double vs the follower’s profit.

• Absence of centralized control; different energy carriers may be owned by different entities. • Crucial to develop market-based approaches facilitating trading of various energy carriers. • Proposes Cournot game model to minimize operating costs of three interacting energy hubs. • Introduces butterfly flame optimization algorithm to discover optimal production levels. In response to the escalating demand for sustainable energy solutions, the integration of diverse energy sources has gained prominence. Energy hubs, facilitating the amalgamation of multiple sources, enhance system efficiency and flexibility. Yet, coordinating the operation of such multi-energy systems remains challenging due to complexity and uncertainties, especially with renewable sources. This paper introduces a Cournot model-based approach for optimizing three interconnected energy hubs. The objective is to minimize total operating costs while ensuring reliability and efficiency. Leveraging the Cournot model, commonly employed in energy studies for competition and pricing, we capture the strategic behavior of energy hubs. The proposed solution employs a modified butterfly flame heuristic algorithm to navigate the non-linear and non-convex optimization problem, efficiently seeking global optimal solutions. Numerical experiments on a three-hub test case validate the method, demonstrating a 3.5 % reduction in total operation costs compared to the base case and over 2.5 % cost reduction for each hub. The proposed algorithm outperforms traditional methods in terms of convergence speed and solution quality, offering a promising avenue for optimizing the operation and management of multi-energy systems. In summary, this paper introduces a novel approach grounded in the Cournot model and a hybrid heuristic algorithm for optimizing three interconnected energy hubs, effectively addressing uncertainties associated with renewable sources and ensuring reliable and efficient system operation. [ABSTRACT FROM AUTHOR]

We investigate why a firm might purposefully hire a chief executive officer (CEO) who under- or over-estimates the degree of substitutability between competing products. This counterintuitive result arises in imperfect competition because CEO bias can affect rival behavior and the intensity of competition. We lay out the conditions under which it is profitable for owners to hire biased managers. Our work shows that a universal policy that effectively eliminates such biases need not improve social welfare. [ABSTRACT FROM AUTHOR]

Copyright of Contaduría y Administración is the property of Facultad de Contaduria y Administracion-Universidad Nacional Autonoma de Mexico and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper investigates a Cournot game model with a nonlinear demand function where a profit-maximizing firm competes against a socially concerned firm. The timing of the game is as follows. In stage one, each firm non-cooperatively decides whether to offer a wage-rise contract policy (WRCP) as a strategic commitment device. In stage two, after observing the rival's decision in stage one, each firm non-cooperatively chooses its actual output. This paper presents the equilibrium solutions of the model. [ABSTRACT FROM AUTHOR]

This paper considers a mixed duopoly model in which a state-owned firm competes with a labor-managed firm. The timing of this game is as follows. In the first stage, each firm decides whether or not to hire a manager. In the second stage, the firms that hired managers select incentive parameters for them. In the third stage, firms compete in Cournot fashion. The paper presents the subgame perfect equilibrium of this model.

Imperfect competition represents one of the main topic of modern economic analysis and it can be easily identified in the current economic climate. Whether we are reffering to the aggregate economic field or to a specific industry, certain topics can be highlighted due to their strong impact on the market analyse tools selection process: the differences between price and quantity competition scenario, competitors movement timing in a duopoly game, the role of product differentiation in determining market output/price levels or the presence of the market hierarchical structure. In order to better expolore the impact of previously mentioned concepts in a duopoly market, our present paper considers a consistent framework, making use of a product differentiation base model. We are discussing the market outcomes under quantity and price competition (Cournot & Bertrand simultaneous moves scenarios) but also sequential moves output competition (Stackelberg duopoly). We are also presenting a numerical simulation analyze that can be efficiently used to explore the model properties under the assumption of products differentiation degree variation. The models utilize both numerical and graphical presentation.

Research question: Utilizing the tenets of oligopoly competition that is a well-known type of imperfect rivalry, this study is interested in building a financial theory of inter-company price or pricing (ICP) economics and documenting its direct affinity with corporate financial reporting in general and corporate financial statements in particular. It is also interested in executing an analytical application unveiling the straight linkage of ICP with financial disclosure. Motivation: There is an extant body of literature that examines different ICP structures for different companies and industries or markets. However, the literature is silent in corroborating any explicit association that we argue and show does exist between ICP and accounting. To the best of our knowledge, this is the first study to break this silence. Idea: Cost advantage and operating profit are exploited to do the theorization and accounting implementation, by justifying the linkage between ICP and business financial statements. Findings: Investigations show that given that businesses transact or compete with each other at arm’s length terms under oligopoly competition with a Stackelberg game; ceteris paribus, the operating profit figure of the business with cost advantage will be higher than the operating profit figure of the business without cost advantage. Investigations also show that given that businesses transact or compete with each other at arm’s length terms under oligopoly competition with a Stackelberg game; ceteris paribus, asset size, earnings before interest and taxes (EBIT), earnings before taxes (EBT) and hence net income/profit after tax (NPAT) figures of the business with cost advantage will always be higher than asset size, EBIT, EBT and therefore NPAT figures of the business without cost advantage. Investigations further suggest that given that businesses transact or compete with each other at arm’s length terms under oligopoly competition with a Cournot game where there is neither any cost advantage nor disadvantage one way or the other; ceteris paribus, the operating profit, asset size, EBIT, EBT and NPAT figures of the interacting business among the others will be identical.

Prior studies presented conflicting findings on the effect of small and medium enterprises (SMEs) concentration on growth rate. A theoretical model of industrial organisation suggested that imperfect competition – having fewer competitors – yields a higher growth rate. This research explores this relationship theoretically and empirically as related to SMEs in Israel. Findings show that having few competitors has a positive significant effect on growth in the number of employees, however, unexpectedly the subsample of SMEs with no competitors did not present any growth advantage. We apply a classic microeconomic analysis and demonstrate the conditions that support this empirical result. [ABSTRACT FROM AUTHOR]

This paper considers a quality and price competition between two asymmetric restaurants, by establishing a two-stage dynamic game model. We nd that the restaurant with the most reputation offers more food with a higher quality than its rival. We also analyse the effects of the difference of restaurants' reputation on the market equilibrium outcomes. We show that the increase in the reputation difference between restaurants decreases profits of the small restaurant and raises prots of the large restaurant, consumer surplus and social welfare. Furthermore, compared with the case under quantity competition instead of price, social welfare is higher under price competition, while the opposite holds for small restaurant's profits. However, the relationship of large restaurant's profits is ambiguous. [ABSTRACT FROM AUTHOR]

Brazil is a country with high solar energy potential due to the vast unhabitaded areas close to the Equator with high availability of solar radiation. With a simple setting, low maintenance costs, sustainability appeal and an inexhaustible power supply, the solar plants have been transformed in attractive investments in the electrical power sector. In the Brazilian Northeastern region, it's possible to find the best conditions for the development of new solar plants due to the climate, dry and sunny all year. The present work aims to present the use of game theory as an innovative method in the investment decision process between two companies of solar energy generation in Northeastrn region of Brazil. The methodology used for this analysis was the Cournot method to conclude whether competition or cooperation among the agents involved prevails in the market.

This study investigates the competitive game between high-speed rail and airline on price, profit and social welfare, taking into account the airline price discrimination. We build a multi-level price competition pricing Cournot model for high-speed rail and airline to shed light on the HSR-air transport competition impact of pricing discrimination when airline could offer multi-level class seats, and analyze the optimal pricing strategy of airlines and high-speed rail operators and their impact on social welfare. The analytical results demonstrate that: airline price dis-crimination will increase social welfare and reduce consumer surplus, both airfare and airline profit increase as the degree of price discrimination increases welfare. However, HSR fare and profit decreases with the increase of the degree of price discrimination. [ABSTRACT FROM AUTHOR]

We investigate why a firm might purposefully hire a chief executive officer (CEO) who under- or over-estimates the degree of substitutability between competing products. This counterintuitive result arises in imperfect competition because CEO bias can affect rival behavior and the intensity of competition. We lay out the conditions under which it is profitable for owners to hire biased managers. Our work shows that a universal policy that effectively eliminates such biases need not improve social welfare.

This paper examines the equilibrium outcomes of firms’ decision games to hire managers when there is a capitalist firm competing against a labor-managed firm. The paper shows that if only the capitalist firm hires a manager, then the equilibrium coincides with the solution when neither firm hires a manager. In addition, the paper shows that if only the labor-managed firm hires a manager, then at equilibrium the capitalist firm’s output and the market price are lower than when neither firm hires a manager.

Imperfect competition represents one of the main topic of modern economic analysis and it can be easily identified in the current economic climate. Whether we are reffering to the aggregate economic field or to a specific industry, certain topics can be highlighted due to their strong impact on the market analyse tools selection process: the differences between price and quantity competition scenario, competitors movement timing in a duopoly game, the role of product differentiation in determining market output/price levels or the presence of the market hierarchical structure. In order to better expolore the impact of previously mentioned concepts in a duopoly market, our present paper considers a consistent framework, making use of a product differentiation base model. We are discussing the market outcomes under quantity and price competition (Cournot & Bertrand simultaneous moves scenarios) but also sequential moves output competition (Stackelberg duopoly). We are also presenting a numerical simulation analyze that can be efficiently used to explore the model properties under the assumption of products differentiation degree variation. The models utilize both numerical and graphical presentation. [ABSTRACT FROM AUTHOR]

We revisit the linear Cournot model with uncertain demand that is studied in Lagerlöf (2006. "Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty." The B.E. Journal of Theoretical Economics 6, no. 1. (Topics), Article 19: 1–6.) and provide sufficient conditions for equilibrium uniqueness that complement the existing results. We show that if the distribution of the demand intercept has the decreasing mean residual demand (DMRD) or the increasing generalized failure rate (IGFR) property, then uniqueness of equilibrium is guaranteed. The DMRD condition implies log-concavity of the expected profits per unit of output without additional assumptions on the existence or the shape of the density of the demand intercept and, hence, answers in the affirmative the conjecture of Lagerlöf (2006. "Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty." The B.E. Journal of Theoretical Economics 6, no. 1. (Topics), Article 19: 1–6.) that such conditions may not be necessary. [ABSTRACT FROM AUTHOR]

The enhancement of load-point reliability level in power distribution systems is usually based on traditional methods including value-based planning (VBP), performance- based rates (PBR) and reliability insurance scheme (RIS). The implementation of these methods has shown that due to weaknesses in their structures, customer reliability requirements were fulfilled rather infrequently. However, satisfying a desired level of reliability for distribution level customers remains to be a major challenge for distribution utilities. In this paper, a new competition model that is based on game theory is introduced which can conclude to more satisfactory results for customers and utilities. The problem formulation shows that the proposed model is similar to the Cornout model in game theory. The presented model has been applied to a sample radial feeder and the results show how the proposed game model can be a more appropriate structure for providing customer reliability in power distribution systems. [ABSTRACT FROM AUTHOR]

The New Bilateral Air Services Agreement between Mexico and the United States specifies that all cargo and passenger aircraft of both countries will allow any airline to flight from one point in the neighboring country and make a stop at another airport to pick up and unload passengers or cargo in the airports of both countries. This paper analyzes the 2016 “open skies agreement” between United States of America and Mexico and its expected effects on the Mexican airlines industry. After reviewing the evidence and analyzing the performance of Mexican and US airlines, it is inferred that the bilateral agreement will increase foreign investment in Mexico due to the entry into the market of a greater number of North American passenger and cargo airlines, but above all, will increase international trade in goods and services, being the United States airline industry the one that will benefit the most due to the superiority of the air fleet over the Mexican. The theoretical Cournot model adapted from Alves and Forte (2015) indicates that airlines that do not have the ability to compete for new routes will be adversely affected, their profits will decrease, an assertion that contradicts the expected effects in the literature.

In this paper, we will analyse the relationship between privatization of a public firm and tax revenue for the domestic government in an international competition, with import tariffs. We consider a duopoly model where a domestic public firmand a foreign private firmcompete in the domesticmarket, asCournot players. Furthermore, the domestic government imposes a tariff to regulate an imported good, and may have a higher preference for tariff revenue than for social welfare. We compute the outputs at equilibrium and we show that privatization (i) will increase the profits of both domestic and foreign firms; (ii) will increase the tariff imposed to the imported good; and (iii) will decrease the domestic welfare. Furthermore, we demonstrate that a rise in the government’s preference for tariff revenues raises the social welfare in both mixed and private models.

Traditional oligopoly models hold that firms compete in the same strategic variable, output (Cournot) or price (Bertrand). Alternatively, a hybrid model allows some firms to compete in output and other firms to compete in price, also known as the Cournot–Bertrand model. When the choice of strategic variable is endogenous, the established dominant strategy is output competition. A growing body of work demonstrates, however, that the Cournot–Bertrand outcome can be a subgame‐perfect Nash equilibrium in the presence of market asymmetries. Observations of real‐world markets consistent with Cournot–Bertrand behavior bolster justification for the model and have stimulated an impressive and evolving literature on advances and applications. We lay out the roots of the Cournot–Bertrand model and explore a number of model developments. We categorize 12 primary models in the literature based on alternative assumptions. In particular, some authors consider when the timing of play as well as the choice of strategic variable are endogenous. Altogether, this research identifies when Cournot–Bertrand behavior can emerge in a dynamic setting and under alternative market conditions. We also review the Cournot–Bertrand model applications in the fields of international economics, industrial organization, labor, and public economics. We expect the literature to continue to expand in the future. [ABSTRACT FROM AUTHOR]

This paper investigates Cournot and Bertrand duopoly models with complementary goods, where firms can enter into lifetime employment contracts with their respective workers as a strategic device. The paper treats the following four cases: ‘Cournot competition with strategic complements’, ‘Cournot competition with strategic substitutes’, ‘Bertrand competition with strategic substitutes’ and ‘Bertrand competition with strategic complements’. The paper presents the equilibrium outcomes of the four cases. In addition, it is shown that lifetime employment is beneficial for firms in the cases with strategic complements.

Digital transformation plays an important role in improving the efficiency of production of enterprises and can provide strong support for green and sustainable development. Compared with domestic enterprises, outward foreign direct investment (OFDI) enterprises have greater access to advanced digital technology. This paper aims to analyze the path selection of green and sustainable production for the digital transformation of manufacturing outward foreign direct investment (OFDI) companies, whether gradual or leapfrogging. However, there is a lack of systemic game mechanisms and numerical simulation methods for heterogeneous enterprises. Based on the analysis of reverse technology spillover intensity of outward foreign direct investment (OFDI) and differences in the absorptive capacity of enterprises, we have proposed the evolutionary game model for different path selection of digital transformation of manufacturing enterprises, due to heterogeneous enterprises under different spillover degrees with numerical analysis methods. The research results show that: (i) Under low reverse technology spillover intensity, all enterprises evolve to a gradual transformation path, and enterprises with weaker absorptive capacity converge faster; (ii) There is a certain threshold for reverse technology spillover. When reverse technology spillover intensity exceeds the threshold, enterprises with stronger absorptive capacity converge to a leapfrog transformation path, but enterprises with weak absorptive capacity converge to a gradual transformation path; (iii) With high reverse technology spillover intensity, all enterprises evolve toward a leapfrog transformation path, and faster convergence happens to enterprises with higher absorptive capacity. The evolutionary game path of digital transformation in manufacturing enterprises is illustrated in Fig. 1., Competing Interests: The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper., (© 2024 The Authors.)

Blockchain has created a revolution in digital networking by using distributed storage, cryptographic algorithms, and smart contracts. Many areas are benefiting from this technology, including data integrity and security, as well as authentication and authorization. Internet of Things (IoTs) networks often suffers from such security issues, which is slowing down wide-scale adoption. In this paper, we describe the employing of blockchain technology to construct a decentralized platform for storing and trading information in the air-to-ground IoT heterogeneous network. To allow both air and ground sensors to participate in the decentralized network, we design a mutual-benefit consensus process to create uneven equilibrium distributions of resources among the participants. We use a Cournot model to optimize the active density factor set in the heterogeneous air network and then employ a Nash equilibrium to balance the number of ground sensors, which is influenced by the achievable average downlink rate between the air sensors and the ground supporters. Finally, we provide numerical results to demonstrate the beneficial properties of the proposed consensus process for air-to-ground networks and show the maximum active sensor's density utilization of air networks to achieve a high quality of service. [ABSTRACT FROM AUTHOR]

This study seeks to examine a game theory view of China and USA FDI outflows using the Static Cournot Model of Complete Information to show how the two countries can come into equilibrium. It is specifically aimed at establish, examining and analyzing the best and fair equilibrium on FDI outflows between the two countries. The study uses annual time series data for a range of 1982 to 2016 on both FDI outflows in China and USA. The study finds Game theory to be the efficient framework on finding the equilibrium of the conflict through Cournot Duopoly Model. The study employed cointegration analysis and OLS method to achieve the objective. The results showed that when game theory is applied in a static situation with complete information, Nash equilibrium is established both when the countries decide to cooperate or not to cooperate. But the gains are much higher when the countries decide to cooperate. The main conclusion is that, there is a conflict solving solution to the battle on FDI outflows between these countries if they decide not to cooperate. However, if both countries decide to cooperate then they will monopolize the FDI outflows market by higher levels and maximize the total gains. [ABSTRACT FROM AUTHOR]

Abstract This analysis investigates whether the Cournot model of imperfect competition holds true in the Japanese retail electricity market, using monthly data over the period 2005 to 2010. One concern about electricity markets that are open to retail competition is the potential for collusive behavior of some suppliers. A revealed preference test of the Cournot model is conducted, using market price and firm output data, as in Carvajal et al. (2013). The application of the revealed preference test to the retail electricity market in Japan indicates that the possibility of collusive behavior among the incumbents cannot be excluded. Highlights • Whether the Cournot model of imperfect competition holds true is investigated. • A revealed preference test is conducted for the retail electricity market in Japan. • The possibility of collusive behavior is indicated in the retail electricity market. • Market size and firm size affect the possibility of collusion among the incumbents. [ABSTRACT FROM AUTHOR]

In this paper, two different mechanisms are used to study a homogeneous Cournot duopoly in a market characterized by the downward sloping and concave price function. Two firms, which have constant marginal costs, use adaptive, low-rationality mechanisms to adjust their production levels toward equilibrium. In particular, the stability of the equilibrium for two different mechanisms is studied. However, complex dynamics arise, especially when the reaction coefficient increases. Finally, we compare the obtained results of the two models.

This article focuses on the strategic behavior of firms in the output and the emissions markets in the presence of market power. We consider the existence of a dominant firm in the permit market and different structures in the output market, including Cournot and two versions of the Stackelberg model, depending on whether the permit dominant firm is a leader or a follower in the output market. In all three models, the firm that dominates the permit market is more sensitive to its initial allocation than its competitor in terms of abatement and less sensitive in terms of output. In all three models, output is decreasing and the permit price is increasing in the permit dominant firm’s initial allocation. In the Cournot model, permit dominance is fruitless in terms of output and profit if the initial allocation is symmetric. Output leadership is more relevant than permit dominance since an output leader always tends to, ceteris paribus, produce more and make more profit whether it also dominates the permit market or not. This leadership can only be overcompensated for by distributing a larger share of permits to the output follower, and only if the total number of permits is large enough. In terms of welfare, Stackelberg is always superior to Cournot. If the initial permit allocation is symmetric, welfare is higher when the same firm dominates the output and the permit market at the same time.

The paper considers the model of strategic interaction of firms at the quantity oligopoly market. There are several price-makers maximizing profits using the Cournot strategy, and also several price-takers obtaining outputs from the equivalence of price and marginal costs. The second strategy can be used due to some rational reasons, for example, unavailability of demand function, and competitors’ cost functions essential for reaction curves construction, or due to misunderstanding of its own market power and influence on the equilibrium parameters. Myopic behavior decreases profits comparing to Cournot firms if occurs unilaterally. But the competitors will adapt, and it can unexpectedly make the second strategy effective. The paper analyses the case of linear demand and symmetric firms with quadratic costs. It’s shown that prace-takers’ output is even greater than the output of the Stackelberg leader. The profit can be greater or lower than the original price-makers profits. It depends on the market parameters include the price elasticity of demand and the rate of marginal costs increasing. It’s shown that the probability for price-taker strategy to be efficient is not big, but increases at a large market with inelastic demand and many firms with slowly increasing marginal costs. It’s better for price-taker to be the only one firm with such a strategy.

It is known that Nash equilibria of potential game belong to the set of stationary points of the potential, moreover only the potential’s global maximum is an equilibrium in general case. In the paper, we consider Cournot oligopoly model with linear inverse demand function and S-shape players’ costs functions determined by cubical polynomials. S-shape form of a function means changing of function’s concavity by its convexity. Costs function of such form reflects changing of increasing return of the scale by decreasing return of the scale, what may be explained as a stage of introduction of a new capacities that is changed by a stage of its normal operation. Such a model is a potential game due to linearity of inverse demand function. The potential is constructed and it has a form of cubical polynomial. Nonconcavity of potential leads to non-uniqueness of equilibrium in general case. Author investigated in other papers the local search of stationary points with multi-start approach and with the following check of the point whether it is an equilibrium. That paper is concerned with an adaptation of branch and bound method for search of the potential’s global maximum which is always an equilibrium point. In the paper, the method is described and numerical experiment results are given.

In this paper, Cournot oligopoly model is examined with an uncertain quadratic cost function. A random quadratic cost function is introduced in this model. The model consists of three competed firms on which each firm in the model wants to maximize its expected profit and also wants to minimize its uncertainty by minimizing the cost. To handle this multi-objective optimization problem, the expectation and worst-case approaches are adopted used to study uncertainty. The existence and uniqueness of the equilibrium are obtained. The asymptotic behavior of the equilibrium point is also investigated. Complete stability and bifurcation analysis are provided. The obtained theoretical results are verified by numerical simulation. [ABSTRACT FROM AUTHOR]

We investigate the price effect of an excise tax in a duopoly setting. Previous studies have considered the Cournot and Bertrand models but ignore the Cournot-Bertrand model in which one firm competes in output and the other firm competes in price. This omission is important because Cournot-Bertrand behavior is observed in the real world, and the Cournot-Bertrand model provides dramatically different results. Unlike in the Cournot and Bertrand models, we find that firms in the same industry have different pass-through rates in the Cournot-Bertrand model even when they face identical demand and cost conditions. This provides another reason why tax incidence policy is so complex. [ABSTRACT FROM AUTHOR]

The U.S. automobile market experienced dramatic changes in concentration over the six decades after World War II. In addition to dynamic changes in market structure, the U.S. automobile market experienced significant public policy changes in the form of price and export controls. This experience provides a unique opportunity to test the effect of changing concentration on prices and the effectiveness of controls in a highly visible, dynamic industry. We identify a threshold concentration level below which prices converge to competitive equilibrium. Above this threshold, pricing is essentially consistent with monopoly pricing. Price controls appear to have reduced automobile prices while export controls had little discernible overall effect. [ABSTRACT FROM AUTHOR]

With the in-depth shift from an industry-based society to a knowledge-based one, innovative companies use their own patents to create and exploit new opportunities. In recent years, leading innovative companies have attempted to establish an inter-enterprises patent portfolio alliance (such as patent pool and so on) and create leveraging opportunities through patent portfolio behavior. In this paper, we consider the question of how many firms and when can implement its patent portfolio behavior for different market structures with homogeneous patential products. Based on the classical Cournot model, we propose an economic game mode and analyze the above question. We find that the profits of the firms that have established a patent portfolio alliance is increasing but also the profits change of the firms that have not established the same patent portfolio alliance is uncertain when compare with the situation with both non-establishing the same patent portfolio alliance and Cournot competition. We also find that there is a minimum moderate number scale of the firms that have established an inter-enterprise patent portfolio alliance within the industries whose enterprises numbers are different. These conclusions not only explain patent portfolio behavior of some innovative firms such as those in the DVD industry 1 1 For more details on the patent portfolio behavior of enterprises in DVD industry, see Section “6.2. A real case” . but also have its potential generalization to some innovative companies and considering how it can be used to indicate profits drivers for inter-enterprises patent portfolio behaviors. [ABSTRACT FROM AUTHOR]

In recent years, some game models were proposed to protect critical infrastructure networks. But they mainly focused on the protection of key nodes, and there are rarely models to consider the fixed-point use of resources. Hence, in this paper, we propose a non-zero-sum simultaneous game model based on the Cournot model. Meanwhile, we presented a novel method of critical node centrality identification based on the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). Simulating the game analysis on scale-free networks, small-world networks and random networks, it is found that the fixed operating nodes and the network topology are key factors in payoffs considering the constraints of resources. Besides, robustness analysis of networks on various sensitivity parameters is given and some effective optimal strategies are acquired to provide decision support for policy-makers. [ABSTRACT FROM AUTHOR]

In this paper, we will analyse the relationship between privatization of a public firm and tax revenue for the domestic government in an international competition, with import tariffs. We consider a duopoly model where a domestic public firmand a foreign private firmcompete in the domesticmarket, asCournot players. Furthermore, the domestic government imposes a tariff to regulate an imported good, and may have a higher preference for tariff revenue than for social welfare. We compute the outputs at equilibrium and we show that privatization (i) will increase the profits of both domestic and foreign firms; (ii) will increase the tariff imposed to the imported good; and (iii) will decrease the domestic welfare. Furthermore, we demonstrate that a rise in the government's preference for tariff revenues raises the social welfare in both mixed and private models. [ABSTRACT FROM AUTHOR]

We analyze the behavior of spot prices in the Colombian wholesale power market, using a series of models derived from industrial organization theory. We first create a Cournot-based model that simulates the strategic behavior of the market-leader power generators, which we use to estimate two industrial organization variables, the Index of Residual Demand and the Herfindahl-Hirschman Index (HHI). We use these variables to create VAR models that estimate spot prices and power market impulse-response relationships. The results from these models show that hydroelectric generators can use their water storage capability strategically to affect off-peak prices primarily, while the thermal generators can manage their capacity strategically to affect on-peak prices. In addition, shocks to the Index of Residual Capacity and to the HHI cause spot price fluctuations, which can be interpreted as the generators´ strategic response to these shocks.

En los mercados eléctricos competitivos existen dos tipos de compañías de generación, las cuales pueden clasificarse de acuerdo a su poder de mercado en compañías tomadoras de precios y compañías líderes de mercado. La oferta óptima de venta de una compañía tomadora depende del comportamiento esperado de los precios de mercado, mientras que la oferta de las compañías líderes es una función de sus correspondientes curvas de demanda residual, ésta captura la forma en la cual varían los precios con respecto a cambios en los niveles de producción de una compañía en particular. El propósito de este artículo es medir el potencial poder de mercado, de una compañía líder, cuando decide competir en cantidades según el modelo estático de Cournot. La compañía líder ha sido modelada como un problema de optimización no lineal con restricciones lineales. Finalmente, se presenta y analiza un caso de estudio.In a competitive electricity market two kinds of generating companies coexist; according to their market power it possible to classify them in price-taking generating companies and leader generating companies. The optimal bidding of price-taking companies depends on the market clearing prices. On the other hand, the optimal bidding of leader companies depends on their corresponding residual demand curves, which capture how the market clearing price changes with the variation on the levels production of a particular generating company. The idea of this article is to assess the potential market power of a leader company when it decides to compete in quantities according to the Cournot model. A non-linear optimization problem has been used to model the lemel the dleader generating company. Finally, a realistic case study is presented and discussed.

In this paper, two different mechanisms are used to study a homogeneous Cournot duopoly in a market characterized by the downward sloping and concave price function. Two firms, which have constant marginal costs, use adaptive, low-rationality mechanisms to adjust their production levels toward equilibrium. In particular, the stability of the equilibrium for two different mechanisms is studied. However, complex dynamics arise, especially when the reaction coefficient increases. Finally, we compare the obtained results of the two models. [ABSTRACT FROM AUTHOR]

A variety of fundamental modelling approaches exist using different competition concepts with and without strategic behaviour to derive electricity prices. To investigate the quality and practicability of these different approaches in energy economics, a perfect competition model, a Cournot model and a Bilevel model are introduced and applied to different situations in the German electricity market. The three electricity market approaches are analysed with respect to their ability to represent electricity prices and the possibility of market power abuse. Market prices are taken as a benchmark for model validity. As a result, the perfect competition model fits best to today's market situation in most hours of the year. The Bilevel approach explains prices in high load hours sometimes better than the competition model. But complexity and calculation time increase disproportionately. In addition to the analysis of model quality, we use three scenarios to quantify how a high renewable feed-in influences the ability to abuse market power. Results show that the ability to address market power strongly depends on the amount of installed capacities. [ABSTRACT FROM AUTHOR]

A model of several interacting Cournot markets is considered. The markets are named interacting because the same number of producers act on each of them. Every producer chooses his own supply volumes on every market using the price situations, his own costs, and production and delivery limitations. It is proved that in the case of linear demand functions the problem of finding the Nash equilibria in the model of interacting Cournot markets represents a potential game, i.e., it is equivalent to a mathematical programming problem. Nonlinear demand functions linearization procedures and preferences of initial problem reduction to the potential game are discussed. [ABSTRACT FROM AUTHOR]

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