IDEAS home Printed from https://ideas.repec.org/p/zbw/esprep/97305.html
   My bibliography  Save this paper

Reconciling Cournot and Bertrand Outcomes: A Review

Author

Listed:
  • Kirui, Benard Kipyegon

Abstract

This paper reconciles the Cournot and Bertrand Models of oligopolistic competition, highlighting its weaknesses and giving an opinion thereafter. The pertinent question in this paper is why Cournot (1838) ignored the price and Bertrand (1883) ignored the quantity? From the review, the main conclusion of this paper is that oligopoly competition is guided in the long run by production capacity competition, as advocated by Cournot, equilibrated through price competition in the short run, as advocated by Bertrand.

Suggested Citation

  • Kirui, Benard Kipyegon, 2013. "Reconciling Cournot and Bertrand Outcomes: A Review," EconStor Preprints 97305, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:97305
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/97305/1/RECONCILING%20COURNOT%20AND%20BERTRAND%20OUTCOMES-%20A%20REVIEW.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Boccard, Nicolas & Wauthy, Xavier, 2000. "Bertrand competition and Cournot outcomes: further results," Economics Letters, Elsevier, vol. 68(3), pages 279-285, September.
    2. Boccard, N. & Wauthy, Xavier, 1996. "The Hotelling Model with Capacity Precommitment," LIDAM Discussion Papers IRES 1997030, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Nov 1997.
    3. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    4. Paolo Buccirossi, 2001. "Price competition and probabilistic demand yield the Cournot outcome, the Bertrand outcome, and much more," Working Papers in Public Economics 41, University of Rome La Sapienza, Department of Economics and Law.
    5. Arijit Mukherjee & Udo Broll & Soma Mukherjee, 2012. "Bertrand Versus Cournot Competition In A Vertical Structure: A Note," Manchester School, University of Manchester, vol. 80(5), pages 545-559, September.
    6. 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.
    7. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simon Loertscher & Leslie Marx, 2014. "An Oligopoly Model for Analyzing and Evaluating (Re)-Assignments of Spectrum Licenses," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(3), pages 245-273, November.
    2. Andrew F. Daughety, 2006. "Cournot Competition," Vanderbilt University Department of Economics Working Papers 0620, Vanderbilt University Department of Economics.
    3. Jean J. Gabszewicz & Jacques-François Thisse, 2000. "Microeconomic theories of imperfect competition," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 47-99.
    4. Chakraborty, Abhishek & Mandal, Prasenjit, 2021. "Channel efficiency and retailer tier dominance in a supply chain with a common manufacturer," European Journal of Operational Research, Elsevier, vol. 294(1), pages 100-121.
    5. Aitor Ciarreta & Javier García†Enríquez, 2018. "Profitable Strategic Delegation With Conjectural Variations," Bulletin of Economic Research, Wiley Blackwell, vol. 70(2), pages 185-203, April.
    6. Tasnadi, Attila, 2006. "Price vs. quantity in oligopoly games," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 541-554, May.
    7. Chao Luo, 2018. "Engineering and Economic Analysis for Electric Vehicle Charging Infrastructure --- Placement, Pricing, and Market Design," Papers 1808.03897, arXiv.org.
    8. Lambertini, Luca, 1997. "Prisoners' Dilemma in Duopoly (Super)Games," Journal of Economic Theory, Elsevier, vol. 77(1), pages 181-191, November.
    9. Simon Loertscher, 2005. "Market making oligopoly," Diskussionsschriften dp0512, Universitaet Bern, Departement Volkswirtschaft.
    10. Vital Anderhub & Werner Güth & Ulrich Kamecke & Hans-Theo Normann, 2003. "Capacity Choices and Price Competition in Experimental Markets," Experimental Economics, Springer;Economic Science Association, vol. 6(1), pages 27-52, June.
    11. Haiyang Xia, 2021. "Price and quantity competition in a differentiated duopoly with heterogeneous beliefs," Manchester School, University of Manchester, vol. 89(1), pages 46-69, January.
    12. Claude d'Aspremont & Rodolphe Dos Santos Ferreira & Louis-André Gérard-Varet, 2007. "Competition For Market Share Or For Market Size: Oligopolistic Equilibria With Varying Competitive Toughness," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 761-784, August.
    13. Junjie Zhou & Xiaoshuai Fan & Ying-Ju Chen & Christopher S. Tang, 2021. "Information Provision and Farmer Welfare in Developing Economies," Manufacturing & Service Operations Management, INFORMS, vol. 23(1), pages 230-245, 1-2.
    14. Camille Cornand & Rodolphe dos Santos Ferreira, 2017. "The social value of information and the competition motive: Price vs. quantity games," Working Papers halshs-01614815, HAL.
    15. Romana L. Autrey & Francesco Bova & David A. Soberman, 2014. "Organizational Structure and Gray Markets," Marketing Science, INFORMS, vol. 33(6), pages 849-870, November.
    16. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2020. "A general model of price competition with soft capacity constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 95-120, July.
    17. Filippo Vergara Caffarelli, 2007. "Merge and Compete: Strategic Incentives for Vertical Integration," Rivista di Politica Economica, SIPI Spa, vol. 97(5), pages 203-244, September.
    18. Chen, Jiawei, 2009. "The effects of mergers with dynamic capacity accumulation," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 92-109, January.
    19. Inderst, Roman & Wey, Christian, 2004. "The incentives for takeover in oligopoly," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1067-1089, November.
    20. Alipranti, Maria & Milliou, Chrysovalantou & Petrakis, Emmanuel, 2014. "Price vs. quantity competition in a vertically related market," Economics Letters, Elsevier, vol. 124(1), pages 122-126.

    More about this item

    Keywords

    Cournot Competition; Bertrand Competition; Oligopoly; equilibrium;
    All these keywords.

    JEL classification:

    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:esprep:97305. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.