Open-loop von Stackelberg equilibrium in the cartel-versus-fringe model

F. Groot, C.A.A.M. Withagen, A.J. Zeeuw, de

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Abstract

In this paper the binding-contracts open-loop von Stackelberg equilibrium in the cartel-versus-fringe model of the supply side of a market for a raw material from an exhaustible natural resource is reconsidered. It is shown that the equilibrium for this model differs from what the previous literature on this model suggests. In particular, the equilibrium price trajectory can display discontinuities. The paper fully proves the statements in an earlier note on this issue.
Original languageEnglish
Place of PublicationEindhoven
PublisherTechnische Universiteit Eindhoven
Number of pages19
Publication statusPublished - 1995

Publication series

NameMemorandum COSOR
Volume9527
ISSN (Print)0926-4493

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