Abstract
We take a differential game approach to model the Ramsey growth model from the standpoint of the representative firm. We identify parametric conditions such that the economy cannot reach the Ramsey golden rule, due to the presence of a stable demand-driven equilibrium. This may happen under Cournot and Bertrand behaviour, as well as social planning. We show that a wave of horizontal mergers can indeed drive the economy towards the Ramsey golden rule.
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© 2007 Birkhäuser Boston
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Cellini, R., Lambertini, L. (2007). Capital Accumulation, Mergers, and the Ramsey Golden Rule. In: Jørgensen, S., Quincampoix, M., Vincent, T.L. (eds) Advances in Dynamic Game Theory. Annals of the International Society of Dynamic Games, vol 9. Birkhäuser Boston. https://doi.org/10.1007/978-0-8176-4553-3_24
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DOI: https://doi.org/10.1007/978-0-8176-4553-3_24
Publisher Name: Birkhäuser Boston
Print ISBN: 978-0-8176-4399-7
Online ISBN: 978-0-8176-4553-3
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