Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jul, 1980, Volume 48, Issue 5

Industry Structure and Cost-Reducing Investment<1187:ISACI>2.0.CO;2-1
p. 1187-1210

M. Therese Flaherty

A dynamic noncooperative game in which firms choose output and cost-reducing investment sequences is developed. The sequences exhibit several properties of manufacturing industries. Several steady states exist. Under some reasonable conditions only industry structures in which firms have different market shares can be locally stable steady states. So the model presents one explanation of the source of differences among firms in homogeneous good oligopolies.

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