Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5078790 | International Journal of Industrial Organization | 2006 | 9 Pages |
Abstract
Model invariances have been used extensively to understand welfare and conduct consequences of firm heterogeneity in a one-product Cournot oligopoly. Nothing is known about the richer and more realistic context of firm heterogeneity in multi-product Cournot oligopoly. In this note, welfare in a two-product Cournot oligopoly is shown to increase (decrease) with an increase in correlation between unit costs when the outputs complement (substitute) in demand. A more qualified correlation structure is required for the result to apply in a three-product Cournot oligopoly when products complement in demand.
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Authors
Harvey E. Lapan, David A. Hennessy,