Cournot Oligopoly and the Theory of Supermodular Games
AbstractWe reconsider the Cournot oligopoly problem in light of the theory of supermodular games. Invoking the recent ordinal version of this theory proposed by Milgrom Shannon (1991), we generalize Novshek's (1985) existence result, give an extension of a classical existence result under symmetry, and provide conditions making a Cournot oligopoly into a log-supermodular game (with the natural order on the action sets). We also provide extensive and precise insight as to why decreasing best-responses are widely regarded as being "typical", for the Cournot model with production costs. Several illustrative examples are provided.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1994013.
Date of creation: 01 Mar 1994
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Other versions of this item:
- Amir, Rabah, 1996. "Cournot Oligopoly and the Theory of Supermodular Games," Games and Economic Behavior, Elsevier, vol. 15(2), pages 132-148, August.
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