On the competitive effects of divisionalization
In this paper, we assume that firms can create independent divisions which compete in quantities in a homogeneous good market. Assuming identical firms and constant returns to scale, we prove that the strategic interaction of firms yields Perfect Competition if the number of firms is beyond some cri...
| Autores: | , |
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| Tipo de documento: | artigo |
| Data de publicação: | 2000 |
| País: | España |
| Recursos: | Universitat Autònoma de Barcelona |
| Repositório: | Dipòsit Digital de Documents de la UAB |
| Idioma: | inglês |
| OAI Identifier: | oai:ddd.uab.cat:220896 |
| Acesso em linha: | https://ddd.uab.cat/record/220896 https://dx.doi.org/urn:doi:10.1016/S0165-4896(98)00047-X |
| Access Level: | Acceso aberto |
| Palavra-chave: | Divisionalization Oligopoly |
| Resumo: | In this paper, we assume that firms can create independent divisions which compete in quantities in a homogeneous good market. Assuming identical firms and constant returns to scale, we prove that the strategic interaction of firms yields Perfect Competition if the number of firms is beyond some critical level. Assuming a fixed cost per firm and an upper bound on the maximum number of divisions, we show that when this upper bound tends to infinity and the fixed cost tends to zero, market equilibrium may yield either Perfect Competition or a Natural Oligopoly. |
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