Profit maximization mitigates competition

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Standard

Profit maximization mitigates competition. / Dierker, Egbert; Grodal, Birgit.

I: Economic Theory, Bind 7, Nr. 1, 1996, s. 139-160.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Dierker, E & Grodal, B 1996, 'Profit maximization mitigates competition', Economic Theory, bind 7, nr. 1, s. 139-160. https://doi.org/10.1007/BF01212187

APA

Dierker, E., & Grodal, B. (1996). Profit maximization mitigates competition. Economic Theory, 7(1), 139-160. https://doi.org/10.1007/BF01212187

Vancouver

Dierker E, Grodal B. Profit maximization mitigates competition. Economic Theory. 1996;7(1):139-160. https://doi.org/10.1007/BF01212187

Author

Dierker, Egbert ; Grodal, Birgit. / Profit maximization mitigates competition. I: Economic Theory. 1996 ; Bind 7, Nr. 1. s. 139-160.

Bibtex

@article{b57f1760ec5611dcbee902004c4f4f50,
title = "Profit maximization mitigates competition",
abstract = "We consider oligopolistic markets in which the notion of shareholders' utility is well-defined and compare the Bertrand-Nash equilibria in case of utility maximization with those under the usual profit maximization hypothesis. Our main result states that profit maximization leads to less price competition than utility maximization. Since profit maximization tends to raise prices, it may be regarded as beneficial for the owners as a whole. Moreover, if profit maximization is a good proxy for utility maximization, then there is no need for a general equilibrium analysis that takes the distribution of profits among consumers fully into account and partial equilibrium analysis suffices",
author = "Egbert Dierker and Birgit Grodal",
year = "1996",
doi = "10.1007/BF01212187",
language = "English",
volume = "7",
pages = "139--160",
journal = "Economic Theory",
issn = "0938-2259",
publisher = "Springer",
number = "1",

}

RIS

TY - JOUR

T1 - Profit maximization mitigates competition

AU - Dierker, Egbert

AU - Grodal, Birgit

PY - 1996

Y1 - 1996

N2 - We consider oligopolistic markets in which the notion of shareholders' utility is well-defined and compare the Bertrand-Nash equilibria in case of utility maximization with those under the usual profit maximization hypothesis. Our main result states that profit maximization leads to less price competition than utility maximization. Since profit maximization tends to raise prices, it may be regarded as beneficial for the owners as a whole. Moreover, if profit maximization is a good proxy for utility maximization, then there is no need for a general equilibrium analysis that takes the distribution of profits among consumers fully into account and partial equilibrium analysis suffices

AB - We consider oligopolistic markets in which the notion of shareholders' utility is well-defined and compare the Bertrand-Nash equilibria in case of utility maximization with those under the usual profit maximization hypothesis. Our main result states that profit maximization leads to less price competition than utility maximization. Since profit maximization tends to raise prices, it may be regarded as beneficial for the owners as a whole. Moreover, if profit maximization is a good proxy for utility maximization, then there is no need for a general equilibrium analysis that takes the distribution of profits among consumers fully into account and partial equilibrium analysis suffices

U2 - 10.1007/BF01212187

DO - 10.1007/BF01212187

M3 - Journal article

VL - 7

SP - 139

EP - 160

JO - Economic Theory

JF - Economic Theory

SN - 0938-2259

IS - 1

ER -

ID: 3047375