Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty

Johan Lagerlof

The B.E. Journal of Theoretical Economics, 2006, vol. 6, issue 1, 8

Abstract: If Cournot oligopolists face uncertainty about the intercept of a linear demand function and if the realized market price must be non-negative, then expected demand becomes convex, which can create a multiplicity of equilibria. This note shows that if the distribution of the demand intercept has a monotone hazard rate and if another, rather weak, assumption is satisfied, then uniqueness of equilibrium is guaranteed.

Keywords: Cournot model; non-negativity constraint; demand uncertainty; unique equilibrium (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (6)

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DOI: 10.2202/1534-598X.1333

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