On the Effects of Entry in Cournot Markets

Rabah AMIR

No 1475, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: In the framework of symmetric Cournot oligopoly, this paper provides two minimal sets of assumptions on the demand and cost functions that imply respectively that, as the number of firms increases, the minimal and maximal equilibria lead to (i) decreasing industry price and increasing or decreasing per-firm output; and (ii) increasing industry price (and decreasing per-firm output.) In both cases, per-firm profits are decreasing. The analysis relies crucially on lattice-theoretic methods and yields general, unambiguous and easily interpretable conclusions of a global nature. As a byproduct of independent interest, new insight into existence of Cournot equilibrium is developed.

Date: Written 2000-08-01
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Related works:
Working Paper: On the Effects of Entry in Cournot Markets (1999)
Working Paper: On the Effects of Entry in Cournot Markets (1998)
Journal Article: On the Effects of Entry in Cournot Markets (2000)
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