Existence and comparative statics in heterogeneous Cournot Oligopolies
AbstractWe 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.
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Bibliographic InfoPaper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number wp388.
Length: 41 pages
Date of creation: 2000
Date of revision:
Cournot oligopoly; Product differentiton; entry; comparative statics; single-crossing condition;
Other versions of this item:
- Hoernig, S., 2000. "Existence and Comparative Statics in Heterogeneous Cournot Oligopolies," Economics Working Papers, European University Institute eco2000/8, European University Institute.
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D43 - Microeconomics - - Market Structure and Pricing - - - 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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