A Nonparametric Analysis of the Cournot Model
AbstractAn observer makes a number of observations of an industry producing a homogeneous good. Each observation consists of the market price, the output of individual rms and perhaps information on each rm's production cost. We provide various tests (typically, linear programs) with which the observer can determine if the data set is consistent with the hypothesis that rms in this industry are playing a Cournot game at each observation. When cost information is wholly or partially unavailable, these tests could potentially be used to derive cost information on the rms. This paper is a contribution to the literature that aims to characterize (in various contexts) the restrictions that a data set must satisfy for it to be consistent with Nash outcomes in a game. It is also inspired by the seminal result of Afriat (and the subsequent literature) which addresses similar issues in the context of consumer demand, though one important technical di erence from most of these results is that the objective functions of rms in a Cournot game are not necessarily quasiconcave. Keywords:
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Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 922.
Date of creation: 2009
Date of revision:
Other versions of this item:
- Andrés Carvajal & John Quah, 2009. "A Nonparametric Analysis of the Cournot Model," Economics Papers 2009-W15, Economics Group, Nuffield College, University of Oxford.
- John Quah & Andres Carvajal, 2009. "A Nonparametric Analysis of the Cournot Model," Economics Series Working Papers 465, University of Oxford, Department of Economics.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-19 (All new papers)
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