Oligopolistic Equilibrium and Financial Constraints

Oligopolistic Equilibrium and Financial Constraints

In this paper we present a model of oligopoly and financial constraints. We study allocations which are bankruptcy-free (BF) in the sense that no firm can drive another firm to bankruptcy without becoming bankrupt. We show how such allocations can be sustained as an equilibrium of a dynamic game. When there are two firms, all equilibria yield BF allocations. When there are more than two firms, ...

Financial instability, oligopolistic banking, and monetary growth

This paper analyses the dynamics of a monetary economy which is characterized by increasing returns to scale in ...nancial intermediation. Due to the non–convexity, two stationary monetary equilibria may exist. The ...rst equilibrium is a saddle with high economic activity and high competition in banking. In the second equilibrium, competition between banks and economic activity are low. Under ...

Multiplicity and Sunspots in General Financial Equilibrium with Portfolio Constraints

This paper explores the role of portfolio constraints in generating multiplicity of equilibrium. We present a simple asset market economy with two goods and two households, households who face constraints on their ability to take unbounded positions in risky stocks. Absent such constraints, equilibrium allocation is unique and is Pareto efficient. With a single portfolio constraint in place, th...

Financial Equilibrium

Duality for vector equilibrium problems with constraints

‎In the paper‎, ‎we study duality for vector equilibrium problems using a concept of generalized convexity in dealing with the quasi-relative interior‎. ‎Then‎, ‎their applications to optimality conditions for quasi-relative efficient solutions are obtained‎. ‎Our results are extensions of several existing ones in the literature when the ordering cones in both the objective space and the constr...