A nonparametric analysis of multi-product oligopolies

We develop revealed preference tests for models of multi-product oligopoly, building on the work in Carvajal et al. (Econometrica 81(6): 2351-2379, 2013). We analyze a Cournot model with multiple goods and show that it has testable restrictions when at least one good is produced by two or more firms...

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Bibliographic Details
Published in:Economic theory 2014-10, Vol.57 (2), p.253-277
Main Authors: Carvajal, Andrés, Deb, Rahul, Fenske, James, Quah, John K.-H.
Format: Article
Language:English
Subjects:
Analysis
Collusion
Consumption
Cost functions
Datasets
Demand curves
Demand shocks
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Elasticity of demand
Equilibrium
Game Theory
Law of demand
Marginal costs
Market demand
Mathematical functions
Microeconomics
Oligopolies
Oligopoly
Preferences
Product differentiation
Public Finance
Qualitative analysis
Research Article
Revealed preferences
Social and Behav. Sciences
Studies
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Summary:We develop revealed preference tests for models of multi-product oligopoly, building on the work in Carvajal et al. (Econometrica 81(6): 2351-2379, 2013). We analyze a Cournot model with multiple goods and show that it has testable restrictions when at least one good is produced by two or more firms. We also develop a revealed preference test for Bertrand oligopoly in a setting where each firm produces a single differentiated good, and these goods are potentially substitutes for each other. Our tests require qualitative assumptions on the shape of the demand curves and (in the Bertrand case) their evolution across observations, but they do not rely on the estimation of market demand.
ISSN:0938-2259
1432-0479
DOI:10.1007/s00199-014-0843-x