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Comparative Statics in Free Entry Cournot Equilibrium

Author

Listed:
  • Fradera, I.
  • Corchon, L.

Abstract

We study the effects of a change in some exogenous variable (the fixed cost or a parameter in the payoff functions) on the strategies played in a Symmetric Cournot Equilibrium with Free Entry (SCEFE). We also show that any observation on prices, profits and number of firms is compatible with the assumption that the market under consideration is a SCEFE. Therefore, in this model, there is no direct link between profitability and the number of active firms.

Suggested Citation

  • Fradera, I. & Corchon, L., 1996. "Comparative Statics in Free Entry Cournot Equilibrium," UFAE and IAE Working Papers 324.96, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    • Handle: RePEc:aub:autbar:324.96
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    Cited by:

    1. Corchon, Luis C. & Fradera, Isabel, 2002. "Comparative statics in Cournot free entry equilibrium," Mathematical Social Sciences, Elsevier, vol. 44(2), pages 155-168, November.

    More about this item

    Keywords

    PRICING; ECONOMIC MODELS; ENTERPRISES;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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