On a foundation for Cournot equilibrium

A. Dickson, R. Hartley

Research output: Contribution to conferencePaper

Abstract

We show in the context of a bilateral oligopoly where all agents are allowed to behave strategically the unexpected result that when the number of buyers becomes large the outcomes in a strategic market game do not converge to those at the Cournot equilibrium. However, convergence to Cournot outcomes is restored if the game is sequential: sellers move simultaneously as do buyers, but the former always move before the latter. This suggests that the ability to commit to supply decisions is an essential feature of Cournot equilibrium.

Conference

ConferenceEuropean Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006
CityVienna, Austria
Period24/08/0628/08/06

Fingerprint

Cournot equilibrium
Buyers
Bilateral oligopoly
Seller
Cournot
Strategic market games

Keywords

  • Cournot competition
  • strategic market game
  • strategic foundation
  • oligopoly

Cite this

Dickson, A., & Hartley, R. (2007). On a foundation for Cournot equilibrium. Paper presented at European Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006, Vienna, Austria, .
Dickson, A. ; Hartley, R. / On a foundation for Cournot equilibrium. Paper presented at European Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006, Vienna, Austria, .33 p.
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abstract = "We show in the context of a bilateral oligopoly where all agents are allowed to behave strategically the unexpected result that when the number of buyers becomes large the outcomes in a strategic market game do not converge to those at the Cournot equilibrium. However, convergence to Cournot outcomes is restored if the game is sequential: sellers move simultaneously as do buyers, but the former always move before the latter. This suggests that the ability to commit to supply decisions is an essential feature of Cournot equilibrium.",
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author = "A. Dickson and R. Hartley",
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Dickson, A & Hartley, R 2007, 'On a foundation for Cournot equilibrium' Paper presented at European Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006, Vienna, Austria, 24/08/06 - 28/08/06, .

On a foundation for Cournot equilibrium. / Dickson, A.; Hartley, R.

2007. Paper presented at European Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006, Vienna, Austria, .

Research output: Contribution to conferencePaper

TY - CONF

T1 - On a foundation for Cournot equilibrium

AU - Dickson, A.

AU - Hartley, R.

PY - 2007

Y1 - 2007

N2 - We show in the context of a bilateral oligopoly where all agents are allowed to behave strategically the unexpected result that when the number of buyers becomes large the outcomes in a strategic market game do not converge to those at the Cournot equilibrium. However, convergence to Cournot outcomes is restored if the game is sequential: sellers move simultaneously as do buyers, but the former always move before the latter. This suggests that the ability to commit to supply decisions is an essential feature of Cournot equilibrium.

AB - We show in the context of a bilateral oligopoly where all agents are allowed to behave strategically the unexpected result that when the number of buyers becomes large the outcomes in a strategic market game do not converge to those at the Cournot equilibrium. However, convergence to Cournot outcomes is restored if the game is sequential: sellers move simultaneously as do buyers, but the former always move before the latter. This suggests that the ability to commit to supply decisions is an essential feature of Cournot equilibrium.

KW - Cournot competition

KW - strategic market game

KW - strategic foundation

KW - oligopoly

M3 - Paper

ER -

Dickson A, Hartley R. On a foundation for Cournot equilibrium. 2007. Paper presented at European Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006, Vienna, Austria, .