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Ludovic A. Julien
''A note on market power in bilateral oligopoly''
( 2015, Vol. 35 No.1 )
In this note we consider a simple bilateral oligopoly model of an exchange economy. We characterize the Cournot-Nash equilibrium and we explore the effectiveness of market power. We provide some measures of relative market power. We show it depends on the relative size of the market and on the ratio of price elasticities of supply. Finally, we study free entry. We show it does not always lead to the competitive equilibrium market outcome.
Keywords: Cournot-Nash equilibrium, strategic market games, Lerner index.
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : May 10 2014 Manuscript Accepted : Mar 11 2015

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