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Aggregation with Cournot competition: an empirical investigation

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  • Koebel, Bertrand
  • Laisney, François

Abstract

This paper empirically investigates the existence of Cournot equilibrium and the validity of the Le Chatelier-Samuelson (LCS) principle in the aggregate. Whereas two well known existence conditions are statistically rejected, we cannot reject a third, original, condition. We also find some empirical evidence for the LCS principle, as well as both increasing and constant returns to scale for two-digit US manufacturing industries. The results highlight the importance of imperfect competition for understanding aggregate growth, investment and employment.

Suggested Citation

  • Koebel, Bertrand & Laisney, François, 2016. "Aggregation with Cournot competition: an empirical investigation," MPRA Paper 72191, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:72191
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    Cited by:

    1. Bertrand Koebel & François Laisney, 2014. "Aggregation with Cournot Competition: the Le Chatelier Samuelson Principle," Annals of Economics and Statistics, GENES, issue 115-116, pages 343-360.
    2. De Monte Enrico, 2024. "Nonparametric Instrumental Regression with Two-Way Fixed Effects," Journal of Econometric Methods, De Gruyter, vol. 13(1), pages 49-66, January.

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    More about this item

    Keywords

    Aggregation; Le Chatelier-Samuelson principle; returns to scale; market power; markup; own-price elasticity.;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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