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On the Existence of Cournot Equilibrium

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  • William Novshek

Abstract

This paper examines the existence of n-firm Cournot equilibrium in a market for a single homogeneous commodity. It proves that if each firm's marginal revenue declines as the aggregate output of other firms increases (which is implied by concave inverse demand) then a Cournot equilibrium exists, without assuming that firms have nondecreasing marginal cost or identical technologies. Also, if the marginal revenue condition fails at a "potential optimal output", there is a set of firms such that no Cournot equilibrium exists. The paper also contains an example of nonexistence with two nonidentical firms, each with constant returns to scale production.

Suggested Citation

  • William Novshek, 1985. "On the Existence of Cournot Equilibrium," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 85-98.
  • Handle: RePEc:oup:restud:v:52:y:1985:i:1:p:85-98.
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    File URL: http://hdl.handle.net/10.2307/2297471
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