Corpus ID: 152355622

Welfare Improving Contracts in Cournot Markets

  title={Welfare Improving Contracts in Cournot Markets},
  author={Eliane Catilina},
  journal={Public Economics},
The question this paper addresses is whether a government can regulate a Cournot oligopolist market to give higher level of welfare without changing either the strategic variable (output quantity) or the way prices are determined (by an auctioneer). The problem is set as a two- stage game played by profit-maximizing firms and a welfare-maximizing government. Firms are symmetric in capacity and technology but asymmetric in ownership. The government owns one firm and uses it strategically. The… Expand