We reconsider the recent work by Okuguchi on (possibly asymmetric) Cournotian firms with two production factors, one of them being inferior. It is shown there that an increase in the price of the inferior factor does raise equilibrium industry output. In addition of providing a simpler and more rigorous proof of such a result, we generalize it to the case of technologies with s ≥ 2 factors and allow some firms not to use the inferior one.
Bertoletti, P., von Mouche, P. (2014). Inferior Factor in Cournot Oligopoly Revisited. JOURNAL OF ECONOMICS, 112(1), 85-90 [10.1007/s00712-013-0342-8].
Inferior Factor in Cournot Oligopoly Revisited
BERTOLETTI, P
;
2014
Abstract
We reconsider the recent work by Okuguchi on (possibly asymmetric) Cournotian firms with two production factors, one of them being inferior. It is shown there that an increase in the price of the inferior factor does raise equilibrium industry output. In addition of providing a simpler and more rigorous proof of such a result, we generalize it to the case of technologies with s ≥ 2 factors and allow some firms not to use the inferior one.
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