Existence, Uniqueness, and Symmetry of Free-Entry Cournot Equilibrium: The Importance of Market Size and Technoligy Choice

Georg Götz ()

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: This article adds technology choice to a free-entry Cournot model with linear demand and constant marginal costs. Firms can choose from a discrete set of technologies. This simple framework yields non-existence of equilibrium, existence of multiple equilibria and equilibria in which ex-ante indentical firms choose different technoligies as possible outcomes. I provide a full characterization of the parameter sets for which these outcomes arise. The (non)-existence problem disappears if vertical market size is large. Non-existence is largely a ´small number´phenemenon. Asymetric equilibria emerge either because of indivisibilities or due to similarity of different technologies in terms of the average costs realized.

JEL-codes: D43 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ind and nep-mic
Date: 2002-11
View list of references

Downloads: (external link)
http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie0214.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:vie:viennp:0214

Access Statistics for this paper

More papers in Vienna Economics Papers from University of Vienna, Department of Economics
Series data maintained by Paper Administrator ().