Optimal Resource Allocation in General Cournot-competitive Equilibrium

Inger Ervik and Christian Soegaard

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Conventional economic theory stipulates that output in Cournot competition is too low relative to that which is attained in perfect competition. We revisit this result in a General Cournot-competitive Equilibrium model with two industries that differ only in terms of productivity. We show that in general equilibrium, the more efficient industry produces too little and the less efficient industry produces too much compared to an optimal scenario with perfect competition. JEL classification: Cournot oligopoly ; GOLE (General Oligopolistic Equilibrium) ; industrial policy. JEL codes: D50 ; H21 ; L13

Date: 2013
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Working Paper: Optimal Resource Allocation in General Cournot-competitive Equilibrium (2013)
Working Paper: OPTIMAL RESOURCE ALLOCATION IN GENERAL COURNOTCOMPETITIVE EQUILIBRIUM (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1010

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