Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes

David Kreps and Jose Scheinkman

Bell Journal of Economics, 1983, vol. 14, issue 2, 326-337

Abstract: Bertrand's model of oligopoly, which gives perfectly competitive outcomes assumes that: (1) there is competition over prices and (2) production follows the realization of demand. We show that both of these assumptions are required. More precisely, consider a two-stage oligopoly game where, first, there is simultaneous production, and second, after production levels are made public, there is price competition. Under mild assumptions about demand, the unique equilibrium outcome is the Cournot outcome. This illustrates that solutions to oligopoly games depend on both the strategic variables employed and the context (game form) in which those variables are employed.

Date: 1983
References: Add references at CitEc
Citations: View citations in EconPapers (1035)

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819832 ... O%3B2-4&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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: https://EconPapers.repec.org/RePEc:rje:bellje:v:14:y:1983:i:autumn:p:326-337

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().