Lapan, Harvey E.; Hennessy, David A.

WP #04027, October 2004

Welfare in a two-product Cournot oligopoly is shown to increase (decrease) with an increase in correlation between unit costs when the outputs complement (substitute) in demand. A more qualified correlation structure is required for the result to apply in a three-product Cournot oligopoly when products complement in demand.

JEL Classification: C60, D43

Keywords: complementarity, arrangement increasing, invariance

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