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Article . 2007
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International Game Theory Review
Article . 2007 . Peer-reviewed
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VARIATIONAL INEQUALITIES IN COURNOT OLIGOPOLY

Authors: C. A. PENSAVALLE; G. PIERI;

VARIATIONAL INEQUALITIES IN COURNOT OLIGOPOLY

Abstract

Consider G = (X1,…,XM,g1,…,gM) an M-player game in strategic form, where the set Xi is an interval of real numbers and the payoff functions gi are differentiable with respect to the related variable xi ∈ Xi. If they are also concave, with respect to the related variable, then it is possible to associate to the game G a variational inequality which characterizes its Nash equilibrium points. In this paper it is considered the variational inequality for two sets of Cournot oligopoly games. In the first case, for any i = 1,…,M, we have Xi = [0,+∞); the market price function is in C1 and convex; the cost production function of the player i is linear and the function xi → gi(…,xi,…) is strictly concave. We prove the existence and uniqueness of the Nash equilibrium point and illustrate, with an example, an algorithm which calculates its components. In the second case, for any i = 1,…,M, we have Xi = [0,+∞); the market price function is in C2 and concave and the cost production function of the i-player is in C2 and convex. In these circumstances, as a consequence of well known facts, the existence and uniqueness of the Nash equilibrium point are guaranteed and also the Tykhonov and Hadamard well-posedness of the game. We prove that the game G is well posed with respect to its variational inequality.

Keywords

Non co-operative games, Cournot oligopoly, Nash equilibria, variational inequalities, well-posedness, jel: jel:C0, jel: jel:D5, jel: jel:B4, jel: jel:C6, jel: jel:D7, jel: jel:C7, jel: jel:M2

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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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