Price increase and stability with new entries in Cournot markets
It is widely accepted in the literature about the classical Cournot oligopoly model that the loss of quasi–competitiveness is linked, in the long run as new firms enter the market, to instability of the equilibrium. In this paper, though, we present a model in which a stable unique symmetric equilibrium is reached for any number of oligopolists as industry price increases with each new entry. Consequently, the suspicion that non–quasi–competitiveness implies, in the long run, instability is proved false.
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- Ushio, Yoshiaki, 1983. "Cournot Equilibrium with Free Entry: The Case of Decreasing Average Cost Functions," Review of Economic Studies, Wiley Blackwell, vol. 50(2), pages 347-54, April.
- Novshek, William., 1984.
"On the Existence of Cournot Equilibrium,"
517, California Institute of Technology, Division of the Humanities and Social Sciences.
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