Note on Oligopoly: Rival Behavior and Efficiency
Volume: Volume 11, No. 2
Issue: Autumn 1980
Pages: pp. 709-714
Authors: Michael Jones
Title: Note on Oligopoly: Rival Behavior and Efficiency
Abstract: This paper explores the relationship between the maximum solution and Nash equilibrium of "rival" oligopolists and the competitive equilibrium of profit maximizers. There is no presumption that quantity-setting oligopolists who attempt to achieve profits that exceed the industry average will produce an industry output below the efficient level; and in the special case of identical firms, maximin behavior or rival firms yields a Nash equilibrium and replicates the outcomes of pure competition.
JEL Classification
Microeconomics Theory of Firm and Industry under Imperfectly Competitive Market Structures (0226)