Cournot Competition and Endogenous Firm Size
AbstractWe study the dynamics of firm size in a repeated Cournot game with unkown demand function. We model the firm as a type of artificial neural network. Each period it must learn to map environmental signals to both demand parameters and its rival's output choice. But this learning game is in the background, and we focus on the endogenous adjustment of network size. We investigate the long-run behavior of firm/network size as a function of profits, rival's size, and the type of adjustment rules used.
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Bibliographic InfoPaper provided by Department of Economics, Rutgers University, Newark in its series Working Papers Rutgers University, Newark with number 2005-001.
Length: 31 pages
Date of creation: Jan 2005
Date of revision:
Firm size; adjustment dynamics; artificial neural networks; Cournot games;
Other versions of this item:
- Francesco Saraceno & Jason Barr, 2004. "Cournot Competition and Endogenous Firm Size," Computing in Economics and Finance 2004 129, Society for Computational Economics.
- Jason Barr & Francesco Saraceno, 2005. "Cournot Competition and Endogenous Firm Size," Sciences Po publications 2005-001, Sciences Po.
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-16 (All new papers)
- NEP-COM-2005-01-16 (Industrial Competition)
- NEP-GTH-2005-01-16 (Game Theory)
- NEP-IND-2005-01-16 (Industrial Organization)
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