Comparative Statics in Free Entry Cournot Equilibrium
AbstractWe study the effects of a change in some exogenous variable (the fixed cost or a parameter in the payoff functions) on the strategies played in a Symmetric Cournot Equilibrium with Free Entry (SCEFE). We also show that any observation on prices, profits and number of firms is compatible with the assumption that the market under consideration is a SCEFE. Therefore, in this model, there is no direct link between profitability and the number of active firms.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 324.96.
Length: 24 pages
Date of creation: 1996
Date of revision:
PRICING; ECONOMIC MODELS; ENTERPRISES;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D40 - Microeconomics - - Market Structure and Pricing - - - General
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- Corchon, Luis C. & Fradera, Isabel, 2002. "Comparative statics in Cournot free entry equilibrium," Mathematical Social Sciences, Elsevier, vol. 44(2), pages 155-168, November.
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