Capacity constraints and voluntary output cutback in dynamic Cournet competition

Article Abstract:

A capacity constraint in a dynamic Cournet competition was analyzed in terms of its effect on the feedback equilibrium. A unique symmetric feedback equilibrium was found to exist with adequate differentiability. A variety of constraints defined by the threshold values were shown to arise when the company's outputs do not exceed the constraint level in the steady state. A marginal change in the capacity constraint level was found to affect the steady-state of companies, implying that under such constraint, the companies voluntarily reduce their steady-state outputs more than what had been set by the constraint.

Research, Competition (Economics)

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Equilibrium asset prices and exchange rates

Article Abstract:

A general international equilibrium model for a world comprised of two logarithmic representative agents trading at a stochastic exchange rate was developed. The model assumes that financial markets are fully integrated. The results showed that the equilibrium expected rate of change of the exchange rate is directly related to the differential of interest rates and the volatility of domestic equity markets, and inversely related to the covariance between foreign and domestic equity markets.

Foreign exchange

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Equilibrium impact of value-at-risk regulation

Article Abstract:

The impact of value-at-risk regulation on financial market equilibrium in continuous-time economies with random investment opportunities is analyzed.

Switzerland, Economic systems, Market risk

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