Friday, May 22, 2009

Oligopolistic producer behavior

> You had a note on how to model oligopolistic producer behavior in GAMS?

Uploaded to http://www.amsterdamoptimization.com/pdf/oligopoly.pdf.

The paper shows that an MCP formulation is natural for this. It also compares prices and quantities with the situation where the firms are merged and a large monopolist is formed. This behavior is easily modeled using a simple NLP model. A numerical experiment like this can be quickly implemented using a modeling language.