On a foundation for Cournot equilibrium

Alex Dickson () and Roger Hartley

No KERP 2007/14, Keele Economics Research Papers from Centre for Economic Research, Keele University

Abstract: We show in the context of a bilateral oligopoly where all agents are allowed to behave strategically the unexpected result that when the number of buyers becomes large the outcomes in a strategic market game do not converge to those at the Cournot equilibrium. However, convergence to Cournot outcomes is restored if the game is sequential: sellers move simultaneously as do buyers, but the former always move before the latter. This suggests that the ability to commit to supply decisions is an essential feature of Cournot equilibrium.

Keywords: Cournot competition; strategic market game; strategic foundation. (search for similar items in EconPapers)
JEL-codes: C72 D43 D51 L13 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2007-10
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind and nep-mic
Note: Previously University of Manchester EDP 0638.
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Working Paper: On a foundation for Cournot equilibrium (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:kee:kerpuk:2007/14

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