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Asymptotic Relations in Cournot’s Quantity Game: Some International Trade Implications - Relazioni asintotiche nel gioco di Cournot: alcune implicazioni per il commercio internazionale

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In this paper, drawing on international trade theory, I derive the asymptotic relation that holds for oligopolists’ iso-profit curves within Cournot’s game and I discuss the properties of the Nash equilibrium. Thereafter, I provide an economic rationale for such a mathematical relation. The results of this exploration suggest that for each firm the asymptotes of the iso-profit curves convey the boundaries towards which output competitors become net purchasers of the produced good. - In questo lavoro, con riferimento alla teoria del commercio internazionale, deriviamo la relazione asintotica verificata dalle curve di iso-profitto di due ipotetiche imprese che in un mercato oligopolistico competono nelle quantità. In aggiunta, dopo aver discusso le proprietà del risultante equilibrio di Nash, forniamo una spiegazione economica di questa relazione matematica. I risultati di questa indagine teorica suggeriscono che per ogni impresa gli asintoti delle curve di iso-profitto rappresentano i limiti produttivi verso i quali i rispettivi contendenti sul mercato del prodotto diventano acquirenti netti nella merce presa in considerazione.

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  • Guerrazzi, Marco, 2013. "Asymptotic Relations in Cournot’s Quantity Game: Some International Trade Implications - Relazioni asintotiche nel gioco di Cournot: alcune implicazioni per il commercio internazionale," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 66(1), pages 47-56.
  • Handle: RePEc:ris:ecoint:0675
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    References listed on IDEAS

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    1. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    2. Collie, David, 1992. "International Trade and Cournot Equilibrium: Existence, Uniqueness and Comparative Statics," Bulletin of Economic Research, Wiley Blackwell, vol. 44(1), pages 55-66, January.
    3. Markusen, James R., 1981. "Trade and the gains from trade with imperfect competition," Journal of International Economics, Elsevier, vol. 11(4), pages 531-551, November.
    4. R. Melvin, James & Warne, Robert D., 1973. "Monopoly and the theory of international trade," Journal of International Economics, Elsevier, vol. 3(2), pages 117-134, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Cournot’s Game; International Trade; Nash Equilibrium; Asymptotes;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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