Ordinal versus cardinal complementarity: the case of cournot oligopoly

Rabah AMIR

No 2004036, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: While ordinal complementarity is more general than cardinal complementarity, the corresponding global sufficient conditions placed on the primitives of a constrained optimization problem are generally not comparable. We explore this issue in detail for the special case of a Cournot firm. We derive necessary and sufficient conditions for downward-sloping best-responses by imposing the ordinal test only for output levels that are actually reached. Both global tests, cardinal and ordinal, are shown not to be critical sufficient conditions. Finally, we confirm that checking supermodularity of suitably transformed profits can work when the global tests for ordinal and cardinal complementarity both fail.

Keywords: Cournot oligopoly; complementarity; supermodularity; single-crossing property (search for similar items in EconPapers)
JEL-codes: C72 D43 L13 (search for similar items in EconPapers)
Date: 2004-06-01
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Journal Article: Ordinal versus cardinal complementarity: The case of Cournot oligopoly (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:cor:louvco:2004036

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