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Aggregation with Cournot Competition: the Le Chatelier Samuelson Principle

Listed author(s):
  • Bertrand Koebel
  • François Laisney

This paper studies the aggregate substitution and expansion effects triggered by changes in input prices in a context where firms supply a homogeneous commodity and compete in quantities à la Cournot. We derive a sufficient condition for the existence of a Cournot equilibrium and show that this condition also ensures that the Le Chatelier-Samuelson principle is satisfied in the aggregate at the Cournot equilibrium, although it may not be satisfied at the firm level.

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File URL: http://www.jstor.org/stable/10.15609/annaeconstat2009.115-116.343
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Article provided by GENES in its journal Annals Of Economics and Statistics.

Volume (Year): (2014)
Issue (Month): 115-116 ()
Pages: 343-360

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Handle: RePEc:adr:anecst:y:2014:i:115-116:p:343-360
DOI: 10.15609/annaeconstat2009.115-116.343
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  1. William Novshek, 1985. "On the Existence of Cournot Equilibrium," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 85-98.
  2. Szidarovszky, F & Yakowitz, S, 1977. "A New Proof of the Existence and Uniqueness of the Cournot Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(3), pages 787-789, October.
  3. Heiner, Ronald A, 1982. "Theory of the Firm in "Short-Run" Industry Equilibrium," American Economic Review, American Economic Association, vol. 72(3), pages 555-562, June.
  4. Roy, Sunanda & Sabarwal, Tarun, 2010. "Monotone comparative statics for games with strategic substitutes," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 793-806, September.
  5. Amir, Rabah, 1996. "Cournot Oligopoly and the Theory of Supermodular Games," Games and Economic Behavior, Elsevier, vol. 15(2), pages 132-148, August.
  6. Sakai, Yasuhiro, 1973. "An Axiomatic Approach to Input Demand Theory," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 735-752, October.
  7. Eichhorn, Wolfgang & Oettli, Werner, 1972. "A General Formulation of the Lechatelier-Samuelson Principle," Econometrica, Econometric Society, vol. 40(4), pages 711-717, July.
  8. Milgrom, Paul & Roberts, John, 1996. "The LeChatelier Principle," American Economic Review, American Economic Association, vol. 86(1), pages 173-179, March.
  9. Koebel, Bertrand M. & Laisney, François, 2010. "The aggregate Le Chatelier Samuelson principle with Cournot competition," ZEW Discussion Papers 10-009, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  10. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
  11. Sunanda Roy & Tarun Sabarwal, 2008. "On the (non-)lattice structure of the equilibrium set in games with strategic substitutes," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(1), pages 161-169, October.
  12. Fevrier, Philippe & Linnemer, Laurent, 2004. "Idiosyncratic shocks in an asymmetric Cournot oligopoly," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 835-848, June.
  13. W. E. Diewert, 1981. "The Elasticity of Derived Net Supply and a Generalized Le Chatelier Principle," Review of Economic Studies, Oxford University Press, vol. 48(1), pages 63-80.
  14. Hoernig, Steffen H., 2003. "Existence of equilibrium and comparative statics in differentiated goods Cournot oligopolies," International Journal of Industrial Organization, Elsevier, vol. 21(7), pages 989-1019, September.
  15. Braulke, Michael, 1984. "The Firm in Short-run Industry Equilibrium: Comment," American Economic Review, American Economic Association, vol. 74(4), pages 750-753, September.
  16. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
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