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Existence and comparative statics in heterogeneous Cournot Oligopolies

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  • Steffen Hoernig

Abstract

We prove the existence of symmetric pure Cournot equilibria with heterogeneous goods under the following condition: each firm reacts to a rise in competirors output in such a way that its market price does not rise. This condition is not related to wether goods are strategic substitutes or complements. We establish that maximum and minimum equilibrium prices are decreasing as more firms enter if competitors outputs enter inverse demand aggregated; for non-aggregative demand prices may increase. Total quantity increases only if each firm's market price is more affected by its own output than competitors outputs.

Suggested Citation

  • Steffen Hoernig, 2000. "Existence and comparative statics in heterogeneous Cournot Oligopolies," Nova SBE Working Paper Series wp388, Universidade Nova de Lisboa, Nova School of Business and Economics.
    • Handle: RePEc:unl:unlfep:wp388
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    Keywords

    Cournot oligopoly; product differentiton; entry; comparative statics; single-crossing condition;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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