Cournot or Walras? Long-Run Results in Oligopoly Games
AbstractRecent literature shows that learning in oligopoly games might in the long run result in the Cournot or in the Walrasian equilibrium. Which outcome is achieved seems to depend on the underlying learning dynamics. This paper analyzes the forces behind the learning mechanisms determining the long-run outcome. The apparent difference between social and individual learning is caused by different degrees of rationality of the learning agents: Learning the Cournot strategy requires the agents to acquire a large amount of information and behavioral sophistication, while the Walrasian strategy can be shown to be a particular "low-rationality result."
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 162 (2006)
Issue (Month): 4 (December)
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Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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