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Market structure, sales to government and the theory of oligopoly

Article Abstract:

The relationship betwen sales to government on the profitability of firms is examined using industry price-cost margin data. Results indicate that while government sales have little impact on large firms, small firms benefit significantly from such sales. The effect holds true for all industries and is independent of the market structure. The findings suggest that government spending is large enough to benefit small but not large firms, and that government efforts to redistribute income from the general taxpayer to the small businesses are successful.

Analysis, Profits, Government purchasing, Corporate profits

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Advance production and Cournot outcomes: an experimental investigation

Article Abstract:

Posted-offer market performance is affected by advance-production decisions. Such finding was established after addition of a binding advance-production decision resulted in the movement of earnings, price and quantity outcomes toward Cournot predictions. Highly variable results that are consistently different from Nash predictions were produced by advance-production markets. In contrast to sales quantities, prices and earnings are substantially below Nash predictions.

Equilibrium (Economics)

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Demand fluctuations and firm heterogeneity

Article Abstract:

A study was conducted to examine the presence of demand fluctuations in markets with firm heterogeneity. The study focuses on firm diversity as an integral part of industrial organization and considers efficiency differences between large and small firms. It is shown that small firms accomodate market fluctuations more easily than large firms because of their employment of more flexible production techniques.

Distribution (Economics), Demand (Economics)

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