Competition and Regulation Via Supply and Demand Functions in Oligopolistic-Oligopsonistic Markets

Harun Bulut () and Semih Koray

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: In this study, we regard the oligopolistic-oligopsonistic markets within the framework of a "double auction" in which both buyers and sellers make bids. To this end, we introduce games where declarations of supply and demand functions (which need not be true) are treated as strategic variables of producers and consumers, respectively, rather than just as "binding commitments" on the part of these parties. Existence of symmetric equilibria of each of these games is established. Most of them are shown to be unique. The equilibrium outcomes of these are compared with the standard Cournot outcome as well as among themselves regarding the market price, total quantity produced, individual consumer's surplus, individual firms' profit and social welfare they lead to. To allow the consumers to behave strategically along with the producers, naturally makes the former better off and the latter worse off, while the net effect of this on total social welfare turns out to be case-contingent.

Keywords: buyer power; demand function equilibria; double auction; oligopoly; oligopsony; supply function equilibria. (search for similar items in EconPapers)
JEL-codes: C71 L10 L51 (search for similar items in EconPapers)
Date: 2008-04-26
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Competition and Regulation via Supply and Demand Functions in Oligopolistic-Oligopsonistic Markets (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:12930

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