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Cournot Competition

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  • Andrew F. Daughety

    ()
    (Department of Economics and Law School, Vanderbilt University)

Abstract

Cournot's 1838 model of strategic interaction between competing firms has become the primary workhorse for the analysis of imperfect competition, and shows up in a variety of fields, notably industrial organization and international trade. This entry begins with a tour of the basic Cournot model and its properties, touching on existence, uniqueness, stability, and efficiency; this discussion especially emphasizes considerations involved in using the Cournot model in multi-stage applications. A discussion of recent applications is provided as well as the URL for an extended bibliography of approximately 125 selected publications from 2001 through 2005.

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File URL: http://www.accessecon.com/pubs/VUECON/vu06-w20.pdf
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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0620.

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Date of creation: Oct 2006
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Handle: RePEc:van:wpaper:0620

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

Related research

Keywords: Cournot models; Cournot equilibrium; oligopoly; multi-stage models of competition; best-response functions.;

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References

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  1. Novshek, William & Sonnenschein, Hugo, 1987. "General Equilibrium with Free Entry: A Synthetic Approach to the Theory of Perfect Competition," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 25(3), pages 1281-1306, September.
  2. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
  3. Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 98(2), pages 185-99, May.
  4. Goeree, Jacob K., 2003. "Bidding for the future: signaling in auctions with an aftermarket," Journal of Economic Theory, Elsevier, Elsevier, vol. 108(2), pages 345-364, February.
  5. Amir, Rabah & Lambson, Val E, 2000. "On the Effects of Entry in Cournot Markets," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(2), pages 235-54, April.
  6. Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, American Economic Association, vol. 75(1), pages 219-27, March.
  7. Jingang Zhao, 1999. "A Characterization of the Negative Welfare Effects of Cost Reduction in Cournot Oligopoly," Working Papers, Ohio State University, Department of Economics 99-06, Ohio State University, Department of Economics.
  8. Das Varma, Gopal, 2003. "Bidding for a process innovation under alternative modes of competition," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(1), pages 15-37, January.
  9. Miller, Nolan H & Pazgal, Amit I, 2001. "The Equivalence of Price and Quantity Competition with Delegation," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 284-301, Summer.
  10. Spencer, Barbara J & Qiu, Larry D, 2001. "Keiretsu and Relationship-Specific Investment: A Barrier to Trade?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 871-901, November.
  11. Gaudet, G. & Salant, S.W., 1988. "Uniqueness Of Cournot Equilibrium: New Results From Old Methods," Cahiers de recherche, Université Laval - Département d'économique 8818, Université Laval - Département d'économique.
  12. AMIR, Rabah, 2004. "Ordinal versus cardinal complementarity : the case of cournot oligopoly," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2004036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  13. Fauli-Oller, Ramon & Sandonis, Joel, 2003. "To merge or to license: implications for competition policy," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(5), pages 655-672, May.
  14. Carlos Alós-Ferrer, 2001. "Cournot versus Walras in Dynamic Oligopolies with Memory," Vienna Economics Papers, University of Vienna, Department of Economics 0110, University of Vienna, Department of Economics.
  15. Povel, Paul & Raith, Michael, 2004. "Financial constraints and product market competition: ex ante vs. ex post incentives," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 22(7), pages 917-949, September.
  16. Amir Ziv, 1993. "Information Sharing in Oligopoly: The Truth-Telling Problem," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 455-465, Autumn.
  17. Hoernig, Steffen H., 2003. "Existence of equilibrium and comparative statics in differentiated goods Cournot oligopolies," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(7), pages 989-1019, September.
  18. Amir, Rabah, 1996. "Cournot Oligopoly and the Theory of Supermodular Games," Games and Economic Behavior, Elsevier, Elsevier, vol. 15(2), pages 132-148, August.
  19. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
  20. Toshimitsu, Tsuyoshi, 2003. "Optimal R&D policy and endogenous quality choice," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(8), pages 1159-1178, October.
  21. Greg Shaffer & Stephen W. Salant, 1999. "Unequal Treatment of Identical Agents in Cournot Equilibrium," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 585-604, June.
  22. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, Elsevier, vol. 34(1), pages 71-94, October.
  23. James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
  24. Droste, Edward & Hommes, Cars & Tuinstra, Jan, 2002. "Endogenous fluctuations under evolutionary pressure in Cournot competition," Games and Economic Behavior, Elsevier, Elsevier, vol. 40(2), pages 232-269, August.
  25. Vives, Xavier, 2004. "Complementarities and Games: New Developments," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4742, C.E.P.R. Discussion Papers.
  26. Mezzetti, C. & Dinopoulos, E., 1989. "Domestic Unionization And Import Competition," Papers, California Davis - Institute of Governmental Affairs 337, California Davis - Institute of Governmental Affairs.
  27. Novshek, William., 1984. "On the Existence of Cournot Equilibrium," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 517, California Institute of Technology, Division of the Humanities and Social Sciences.
  28. Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 95(380a), pages 138-47, Supplemen.
  29. Novshek, William & Sonnenschein, Hugo, 1978. "Cournot and Walras equilibrium," Journal of Economic Theory, Elsevier, Elsevier, vol. 19(2), pages 223-266, December.
  30. Daughety, Andrew F, 1990. "Beneficial Concentration," American Economic Review, American Economic Association, American Economic Association, vol. 80(5), pages 1231-37, December.
  31. Bergstrom, Theodore C. & Varian, Hal R., 1985. "Two remarks on Cournot equilibria," Economics Letters, Elsevier, Elsevier, vol. 19(1), pages 5-8.
  32. Seade, Jesus, 1980. "The stability of cournot revisited," Journal of Economic Theory, Elsevier, Elsevier, vol. 23(1), pages 15-27, August.
  33. Symeonidis, George, 2003. "Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(1), pages 39-55, January.
  34. Andrew F. Daughety, 1985. "Reconsidering Cournot: The Cournot Equilibrium is Consistent," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 368-379, Autumn.
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