Citation

Discussion Paper Details

Please find the details for DP1810 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Keeping Up With the Joneses: Competition and the Evolution of Collusion in an Oligopolistic Economy

Author(s): Huw David Dixon

Publication Date: March 1998

Keyword(s): aspirations, Average, Evolution and Learning

Programme Area(s): Industrial Organization

Abstract: An economy consists of many duopolistic markets. Firms must earn normal profits in the long run if they are to survive. Normal profits are interpreted as the long-run limit of average profits in the whole economy. We adopt the aspiration based model of firm behaviour, and link it to the economy with the requirement that in the long run the profit aspiration must be at least as great as normal profits. We assume that the joint profits can be maximized with symmetric payoffs, and with very few other assumptions are able to show that the (almost) global attractor is the cooperative outcome.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1810

Bibliographic Reference

Dixon, H. 1998. 'Keeping Up With the Joneses: Competition and the Evolution of Collusion in an Oligopolistic Economy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1810