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On the Profitability of Production Constraints in a Dynamic Natural Resource Oligopoly

Author

Listed:
  • Benchkeroun, H.
  • Gaudet, G.
Abstract
Static oligopoly analysis predicts that if a single firm in Cournot equilibrium were to be constrained to contract its production marginally, its profits would fall. On the other hand, if all the firms were simultaneously constrained to reduce their productino, thus moving the industry towards monopoly output, each firm's profit would rise. We show that these very intuitive results may not hold in a dynamic oligopoly.

Suggested Citation

  • Benchkeroun, H. & Gaudet, G., 1997. "On the Profitability of Production Constraints in a Dynamic Natural Resource Oligopoly," Cahiers de recherche 9717, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    • Handle: RePEc:mtl:montec:9717
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    Keywords

    OLIGOPOLIES;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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