The strategic Marshallian cross

Alex Dickson, Roger Hartley

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

We prove existence and uniqueness of non-autarkic equilibria in bilateral oligopoly assuming only that preferences are binormal and satisfy a weakened version of gross substitutes. We permit complete heterogeneity of preferences and our analysis exploits the fact that payoffs depend only on own strategy and two universal aggregates. This allows us to define strategic versions of supply and demand curves such that non-autarkic Nash equilibria are in 1-1 correspondence with intersections of these curves. The same approach can be used to establish comparative statics under the assumptions above. As examples, we focus on adding players and changing endowments. This competitive approach also allows us to conclude that much of conventional Marshallian analysis is robust to strategic manipulation.. Strategic Marshallian cross Strategic manipulation Imperfect competition
Original languageEnglish
Pages (from-to)514-532
Number of pages18
JournalGames and Economic Behavior
Volume64
Issue number2
DOIs
Publication statusPublished - Nov 2008

Keywords

  • strategic Marshallian cross
  • strategic manipulation
  • imperfect competition
  • economic policy

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