Cournot Oligopoly Under Strategic Uncertainty With Optimistic And Pessimistic Firms
AbstractIn this paper the Cournot oligopoly under uncertainty is analyzed by means of the Choquet Expected Utility (CEU) theory. Firms are supposed to be either optimistic (CEU maximizers who hold concave capacities) or pessimistic (convex capacities). Reaction functions, equilibrium quantities, prices and profits are derived and compared for different degrees of uncertainty and uncertainty attitude (optimism or pessimism). It is proved that optimists make higher profits than pessimists whenever uncertainty is sufficiently low. If it is high just optimists participate in the market making losses. An interpretation of the main results in terms of the market's level of maturity is provided. Copyright Blackwell Publishing Ltd 2005.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Metroeconomica.
Volume (Year): 56 (2005)
Issue (Month): 3 (07)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386
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- Eichberger, Jürgen & Kelsey, David & Schipper, Burkhard, 2007.
"Ambiguity and Social Interaction,"
Sonderforschungsbereich 504 Publications
07-19, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Jurgen Eichberger & David Kelsey & Burkhard C. Schipper, 2005. "Ambiguity and Social Interaction," Discussion Papers 0504, Exeter University, Department of Economics.
- Burkhard C. Schipper & David Kelsey, 2005. "Ambiguity and Social Interaction," Working Papers 536, University of California, Davis, Department of Economics.
- Eichberger, Jürgen & Kelsey, David & Schipper, Burkhard C., 2005. "Ambiguity and Social Interaction," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 59, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Eichberger, Jürgen & Kelsey, David & Schipper, Burkhard, 2003. "Ambiguity and Social Interaction," Sonderforschungsbereich 504 Publications 03-30, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Juergen Eichberger & David Kelsey & Burkhard C. Schipper, 2003. "Ambiguity and Social Interaction," Bonn Econ Discussion Papers bgse23_2003, University of Bonn, Germany.
- Jürgen Eichberger & David Kelsey & Burkhard C. Schipper, 2007. "Ambiguity and Social Interaction," Working Papers 0443, University of Heidelberg, Department of Economics, revised May 2007.
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