Firms` Strategic Decisions: Theoretical and Empirical Findings

Volume: 1

Consistent Conjectural Variations Equilibrium in a Mixed Oligopoly with a Labor Input Function

Author(s): Vyacheslav V. Kalashnikov, Vitaliy V. Kalashnikov-Jr, Aarón Arévalo Franco and Felipe J. Castillo Pérez

Pp: 114-138 (25)

DOI: 10.2174/9781681080383115010011

* (Excluding Mailing and Handling)


The present chapter studies conjectured variations equilibrium states (CVEs) in a mixed oligopoly model. It is different from a classical oligopoly in that a labormanaged firm is involved. The agents (including the labor-managed firm) when making decisions use conjectures about how the market clearing price can vary as a result of varying their supplies. The concept of equilibrium with the conjectures is different from the classical Cournot-Nash one. Under fixed feasible conjectures, the existence and uniqueness theorems for the conjectured variations equilibrium (called the exterior equilibrium) are proven. With an aim to specify a more complicated notion of the interior equilibrium, a consistency criterion for the conjectures (called also as influence coefficients) is proposed. The existence of at least one consistent conjectural variations equilibrium state (CCVE) is also established. Numerical experiments with a small test oligipoly are also described.

Keywords: Consistent conjectural variations equilibrium, exterior equilibrium, homogeneous good, income per worker, influence coefficients, interior equilibrium, labor managed firm, labor input function, mixed oligopoly, Nash- Cournot equilibrium.

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