Natural monopoly equilibria: Nash and von Stackelberg solutions

Klaus G. Becker

doi:10.1016/0148-6195(94)90007-8

Natural monopoly equilibria: Nash and von Stackelberg solutions

Klaus G. Becker

Economic

Research output: Contribution to journal › Article › peer-review

Abstract

This paper provides a game-theoretic analysis of price-sustainable industry configurations in natural monopoly. We show that the sustainable configuration is the unique Nash equilibrium, and that it is also von Stackelberg equilibrium if any firm has to fulfill all demand at the quoted price. Furthermore, given this assumption, even configurations that are not price-sustainable according to the contestability theory are Nash equilibria.

Original language	English
Pages (from-to)	135-139
Number of pages	5
Journal	Journal of Economics and Business
Volume	46
Issue number	2
DOIs	https://doi.org/10.1016/0148-6195(94)90007-8
State	Published - May 1994

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AB - This paper provides a game-theoretic analysis of price-sustainable industry configurations in natural monopoly. We show that the sustainable configuration is the unique Nash equilibrium, and that it is also von Stackelberg equilibrium if any firm has to fulfill all demand at the quoted price. Furthermore, given this assumption, even configurations that are not price-sustainable according to the contestability theory are Nash equilibria.

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Natural monopoly equilibria: Nash and von Stackelberg solutions

Abstract

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