AbstractWe consider a model of Cournot competition where firms have incomplete information about their rivals’ costs. The equilibrium concept we use is that of Bayesian-Nash equilibrium. Our analysis is particularly novel since we recognise that each firm’s payoff is determined by its strategy choice and the unweighted sum of all firms’ strategy choices. By exploiting this "aggregative structure", we are able to characterise equilibria in a very simple way, and based on this characterisation we develop sufficient conditions under which there is a unique equilibrium. A comparative statics analysis is also carried out.
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Bibliographic InfoPaper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2005/01.
Length: 44 pages
Date of creation: Feb 2005
Date of revision:
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Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
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Web page: http://www.keele.ac.uk/depts/ec/cer/
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Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-13 (All new papers)
- NEP-COM-2006-05-13 (Industrial Competition)
- NEP-MIC-2006-05-13 (Microeconomics)
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