Consistent Conjectural Variations Equilibrium in a Mixed Oligopoly with a Labor Input Function

The present chapter studies conjectured variations equilibrium states (CVEs) in a mixed oligopoly model. It is different from a classical oligopoly in that a labormanaged firm is involved. The agents (including the labor-managed firm) when making decisions use conjectures about how the market clearing price can vary as a result of varying their supplies. The concept of equilibrium with the conjectures is different from the classical Cournot-Nash one. Under fixed feasible conjectures, the existence and uniqueness theorems for the conjectured variations equilibrium (called the exterior equilibrium) are proven. With an aim to specify a more complicated notion of the interior equilibrium, a consistency criterion for the conjectures (called also as influence coefficients) is proposed. The existence of at least one consistent conjectural variations equilibrium state (CCVE) is also established. Numerical experiments with a small test oligipoly are also described.

Keywords: Consistent conjectural variations equilibrium, exterior equilibrium, homogeneous good, income per worker, influence coefficients, interior equilibrium, labor managed firm, labor input function, mixed oligopoly, Nash- Cournot equilibrium.