Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model

This study introduces Stackelberg-Nash equilibrium to neoclassical growth theory. It attempts to make neoclassical economic growth theory more robust in modelling the complexity of market structures. The model is constructed within the framework of the Solow-Uzawa two-sector model. The economy is c...

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Autor principal:	Wei-Bin Zhang
Formato:	article
Lenguaje:	EN ES
Publicado:	Universidad de Antioquia 2021
Materias:	Stackelberg competition leader and follower perfect competition capital accumulation Solow model Uzawa model Economic history and conditions HC10-1085 Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/0ff0be256d054cd481aa6a02a258ea67
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spelling	oai:doaj.org-article:0ff0be256d054cd481aa6a02a258ea672021-11-23T04:08:23ZStackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model10.17533/udea.le.n96a3425880120-25962323-0622https://doaj.org/article/0ff0be256d054cd481aa6a02a258ea672021-11-01T00:00:00Zhttps://revistas.udea.edu.co/index.php/lecturasdeeconomia/article/view/342588https://doaj.org/toc/0120-2596https://doaj.org/toc/2323-0622 This study introduces Stackelberg-Nash equilibrium to neoclassical growth theory. It attempts to make neoclassical economic growth theory more robust in modelling the complexity of market structures. The model is constructed within the framework of the Solow-Uzawa two-sector model. The economy is composed of two sectors. The final goods sector is the same as in the Solow one-sector growth model which is characterized by perfect competition. The consumer goods sector is the same as the consumer goods sector in the Uzawa model but is characterized by Stackelberg duopoly. We model household behavior with Zhang’s concept of disposable income and utility. The model endogenously determines profits of duopoly which are equally distributed among the homogeneous population. We build the model and then identify the existence of an equilibrium point through simulation. We conduct comparative static analyses of some parameters. We also compare the economic performance of the traditional Uzawa model and the model with the Stackelberg-Nash equilibrium. We conclude that the imperfect competition increases national output, national wealth, and utility level in comparison to perfect competition. Wei-Bin ZhangUniversidad de AntioquiaarticleStackelberg competitionleader and followerperfect competitioncapital accumulationSolow modelUzawa modelEconomic history and conditionsHC10-1085Economics as a scienceHB71-74ENESLecturas de Economía, Iss 96 (2021)
institution	DOAJ
collection	DOAJ
language	EN ES
topic	Stackelberg competition leader and follower perfect competition capital accumulation Solow model Uzawa model Economic history and conditions HC10-1085 Economics as a science HB71-74
spellingShingle	Stackelberg competition leader and follower perfect competition capital accumulation Solow model Uzawa model Economic history and conditions HC10-1085 Economics as a science HB71-74 Wei-Bin Zhang Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
description	This study introduces Stackelberg-Nash equilibrium to neoclassical growth theory. It attempts to make neoclassical economic growth theory more robust in modelling the complexity of market structures. The model is constructed within the framework of the Solow-Uzawa two-sector model. The economy is composed of two sectors. The final goods sector is the same as in the Solow one-sector growth model which is characterized by perfect competition. The consumer goods sector is the same as the consumer goods sector in the Uzawa model but is characterized by Stackelberg duopoly. We model household behavior with Zhang’s concept of disposable income and utility. The model endogenously determines profits of duopoly which are equally distributed among the homogeneous population. We build the model and then identify the existence of an equilibrium point through simulation. We conduct comparative static analyses of some parameters. We also compare the economic performance of the traditional Uzawa model and the model with the Stackelberg-Nash equilibrium. We conclude that the imperfect competition increases national output, national wealth, and utility level in comparison to perfect competition.
format	article
author	Wei-Bin Zhang
author_facet	Wei-Bin Zhang
author_sort	Wei-Bin Zhang
title	Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
title_short	Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
title_full	Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
title_fullStr	Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
title_full_unstemmed	Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
title_sort	stackelberg-nash equilibrium and perfect competition in the solow-uzawa growth model
publisher	Universidad de Antioquia
publishDate	2021
url	https://doaj.org/article/0ff0be256d054cd481aa6a02a258ea67
work_keys_str_mv	AT weibinzhang stackelbergnashequilibriumandperfectcompetitioninthesolowuzawagrowthmodel
_version_	1718417302178758656

Stackelberg-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model

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