Some Remarks on Oligopolistic Equilibrium

Keyzer, M.A. (1976). Some Remarks on Oligopolistic Equilibrium. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-76-021

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Abstract

This paper may be considered as a continuation of "Some Instruments of Agricultural Policies in a General Equilibrium Framework". In that paper, national governments were assumed to introduce tariffs and quota on international trade and possibly even a stock policy, for two purposes: (1) in order to keep the balance of trade of certain commodities within desired bounds, or (2) in order to reach a certain desired domestic price level. Both producers and consumers were assumed to take all prices as given and the governments to take the world market prices as given.

Neither of these papers deals with the specific goals which would determine these desired levels for domestic variables. A later paper will discuss possible optimum (tariff) strategies, but to do this in a relevant way, one first needs more information about the actual goals of the different societies and governments. Actually, this paper will not reach the subject of government policies. It should be considered a preparation for the discussion of imperfect competition between nations. In other words, the government of a country, especially of a large one, may try to influence variables other than domestic variables by means of tariffs, quota, etc. It may, for example, try to influence world market prices.

But in order to maintain a connection with economic theory, and in order to understand the basic features of oligopoly, this paper shall discuss only the interaction between producer and consumer, without governmental influence.

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