A non-quasi-competitive Cournot oligopoly with stability
AbstractThis paper presents a classical Cournot oligopoly model with some peculiar features: it is non--quasi--competitive as price under N-poly is greater than monopoly price; Cournot equilibrium exists and is unique with each new entry; the successive equilibria after new entries are stable under the adjustment mechanism that assumes that actual output of each seller is adjusted proportionally to the difference between actual output and profit maximizing output. Moreover, the model tends to perfect competition as N goes to infinity, reaching the monopoly price again.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 357.
Date of creation: Feb 1999
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Cournot equilibrium; non-cooperative oligopoly; quasi-competitiveness; stability;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
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- Rosenthal, Robert W, 1980. "A Model in Which an Increase in the Number of Sellers Leads to a Higher Price," Econometrica, Econometric Society, vol. 48(6), pages 1575-79, September.
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