A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments
In their efforts to create and maintain a position in a market, firms make positioning investments of various sorts, in R&D, plant, advertising, and location, or more generally, in product development and maintenance. In an environment where the success of positioning investments is stochastic,...
| Main Authors: | , , |
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| Format: | Journal Article |
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Routledge
2014
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| Online Access: | http://hdl.handle.net/20.500.11937/13138 |
| _version_ | 1848748268290310144 |
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| author | Bloch, Harry Eaton, C. Rothschild, R. |
| author_facet | Bloch, Harry Eaton, C. Rothschild, R. |
| author_sort | Bloch, Harry |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | In their efforts to create and maintain a position in a market, firms make positioning investments of various sorts, in R&D, plant, advertising, and location, or more generally, in product development and maintenance. In an environment where the success of positioning investments is stochastic, the positioning game played by firms that compete to serve a market is necessarily dynamic. We model the positioning and operating decisions of firms in an environment of this sort. When the market is large enough to support at least one active firm, in the steady state equilibrium, the expected number of firms serving the market at a point in time is a nearly continuous function of market size, in sharp contrast to the familiar integer-valued step function seen in classic models, and expected total and consumer surplus are higher than standard non-stochastic models would indicate. This suggests that the classic models are not always a sound guide for policy. |
| first_indexed | 2025-11-14T07:02:20Z |
| format | Journal Article |
| id | curtin-20.500.11937-13138 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T07:02:20Z |
| publishDate | 2014 |
| publisher | Routledge |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-131382017-09-13T14:58:12Z A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments Bloch, Harry Eaton, C. Rothschild, R. Markov Perfect Equilibrium Positioning Investments Firm Dynamics Dynamic Oligopoly Oligopoly Theory Market Structure In their efforts to create and maintain a position in a market, firms make positioning investments of various sorts, in R&D, plant, advertising, and location, or more generally, in product development and maintenance. In an environment where the success of positioning investments is stochastic, the positioning game played by firms that compete to serve a market is necessarily dynamic. We model the positioning and operating decisions of firms in an environment of this sort. When the market is large enough to support at least one active firm, in the steady state equilibrium, the expected number of firms serving the market at a point in time is a nearly continuous function of market size, in sharp contrast to the familiar integer-valued step function seen in classic models, and expected total and consumer surplus are higher than standard non-stochastic models would indicate. This suggests that the classic models are not always a sound guide for policy. 2014 Journal Article http://hdl.handle.net/20.500.11937/13138 10.1080/13571516.2014.956431 Routledge restricted |
| spellingShingle | Markov Perfect Equilibrium Positioning Investments Firm Dynamics Dynamic Oligopoly Oligopoly Theory Market Structure Bloch, Harry Eaton, C. Rothschild, R. A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments |
| title | A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments |
| title_full | A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments |
| title_fullStr | A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments |
| title_full_unstemmed | A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments |
| title_short | A Dynamic Model of Oligopolistic Market Structure, Featuring Positioning Investments |
| title_sort | dynamic model of oligopolistic market structure, featuring positioning investments |
| topic | Markov Perfect Equilibrium Positioning Investments Firm Dynamics Dynamic Oligopoly Oligopoly Theory Market Structure |
| url | http://hdl.handle.net/20.500.11937/13138 |