On a foundation for Cournot equilibrium

A. Dickson, R. Hartley

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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.
Original languageEnglish
Number of pages33
Publication statusPublished - 2007
EventEuropean Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006 - Vienna, Austria
Duration: 24 Aug 200628 Aug 2006

Conference

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

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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, .