Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

3-2008

Journal or Book Title

International Journal of Industrial Organization

Volume

26

Issue

2

First Page or Article ID Number

598

Last Page

606

DOI

10.1016/j.ijindorg.2007.04.007

Abstract

Our context involves N Cournot oligopolists producing M products at constant marginal costs when preferences are quasilinear. We identify relationships between second moments of unit costs and second moments of firm-level production. For example, a larger variance in unit costs of a product increases own output variance and the variance of any other output. We also investigate how second moments of unit costs affect industry cost efficiency. Industry costs can rise if the wrong firm secures a cost reduction. For quadratic preferences, it is shown that Zhao's (Zhao, J., 2001. A characterization for the negative welfare effects of cost reduction in Cournot oligopoly. International Journal of Industrial Organization 19, 455–469 (3–4, March)) share criteria for an increase in unit costs to increase welfare extend to the multi-product setting.

JEL Classification

C6, D43

Comments

This is a manuscript of an article from International Journal of Industrial Organization 26 (2008): 598, doi: 10.1016/j.ijindorg.2007.04.007. Posted with permission.

Rights

This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Copyright Owner

Elsevier B. V.

Language

en

File Format

application/pdf

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