Network Oligopolies with Multiple Markets

Abstract

Cournot oligopolies with multiple markets are examined when transportation costs from each manufacturer to all markets are also included into the profit functions. Under general and realistic conditions the equilibrium always exists, and based on the Kuhn-Tucker conditions a computer method is introduced to compute it. The dynamic extension of the model is also introduced with gradient adjustment, and the asymptotic stability of the equilibrium is examined. In the case of independent markets and linear price and cost functions the solution algorithm is simplified and the global asymptotic stability of the equilibrium is proved.