On the existence and stability of equilibria in N-firm Cournot–Bertrand oligopolies

Anne-Christine Barthel () and Eric Hoffmann ()
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Anne-Christine Barthel: West Texas A&M University
Eric Hoffmann: West Texas A&M University

Theory and Decision, 2020, vol. 88, issue 4, No 1, 491 pages

Abstract: Abstract This paper takes a novel approach to studying the existence and stability of Nash equilibria in N-firm Cournot–Bertrand oligopolies. First, we show that such games can be monotonically embedded into a game of strategic heterogeneity, so that each firm best responds to the choices of all other firms in a monotonic way. We then show that this monotonicity can be exploited to derive conditions which guarantee the existence of a unique, dominance solvable Nash equilibrium which is stable under all adaptive dynamics. These conditions constitute a strict improvement over existing results in the literature. Finally, we examine the effect on these conditions resulting from additional firms entering the market.

Keywords: Cournot–Bertrand competition; Games of Strategic Heterogeneity; Stability (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11238-019-09739-y

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