Mixed oligopoly with consistent conjectures
In this paper, we consider a model of mixed oligopoly with conjectural variations equilibrium (CVE). The agents conjectures concern the price variations depending upon their production outputs increase or decrease. We establish existence and uniqueness results for the conjectural variations equilibrium (called an exterior equilibrium) for any set of feasible conjectures. To introduce the notion of an interior equilibrium, we develop a consistency criterion for the conjectures (referred to as influence coefficients) and prove the existence theorem for the interior equilibrium (understood as a CVE with consistent conjectures). To prepare the base for the extension of our results to the case of non-differentiable demand functions, we also investigate the behavior of the consistent conjectures in dependence upon a parameter representing the demand functions derivative with respect to the market price.
consistent conjectures conjectural variations equilibrium game theory