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Retailer Leadership under Monopolistic Competition

  • MATHEMATICAL GAME THEORY AND APPLICATIONS
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Abstract

We investigate a modification of the Dixit–Stiglitz model supplemented by retailing; namely, we consider various situations of Stackelberg equilibrium under retailer leadership and the condition of free entry of manufacturers to the market. For each of the situations, we provide detailed solutions considered taking into account the preferences of participants in the market interaction. This allows one to understand which of the considered situations are most beneficial to occur for retailer, manufacturers, and for society as a whole. Moreover, optimal taxation is considered. Situations are revealed when it is beneficial for the state to tax and when, on the contrary, to subsidize the producer.

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Notes

  1. When solving the problem in the general case, it was established that only symmetric solutions arise [17].

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ACKNOWLEDGMENTS

The author thanks her supervisor I.A. Bykadorov for helpful discussions.

Funding

The study was carried out within the framework of the state assignment for the Sobolev Institute of Mathematics, project no. FWNF-2022-0019.

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Authors and Affiliations

  1. Novosibirsk State University, Novosibirsk, 630090, Russia

    O. A. Tilzo

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  1. O. A. Tilzo
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Correspondence to O. A. Tilzo.

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Translated by V. Potapchouck

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Tilzo, O.A. Retailer Leadership under Monopolistic Competition. Autom Remote Control 83, 1665–1678 (2022). https://doi.org/10.1134/S00051179220100186

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  • DOI: https://doi.org/10.1134/S00051179220100186

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