A comparison between the core and the monopoly solutions in a mixed exchange economy |
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Authors: | Benyamin Shitovitz |
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Institution: | (1) Department of Economics, Haifa University, Haifa 31905, ISRAEL, IL |
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Abstract: | Summary. Using a mixed market model for analyzing imperfectly competitive economies, we maximize the oligopolists' Welfare Function,
given individual rationality and feasibility constraints. We prove that solutions belong to the core for a large class of
economies. This class includes, in particular, every monopoly having a single type of small traders. Note that all such solutions
yield the large trader, utility-wise, strictly more than at any monopoly solution, where the monopolist plays strategically,
and the ocean of small traders act as being as price-takers.
Received: March 4, 1996; revised version July 7, 1996 |
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Keywords: | JEL Classification Numbers: C71 D42 D51 |
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