The Classical Cournot Model

Gian-Italo Bischi (), Carl Chiarella, Michael Kopel and Ferenc Szidarovszky ()
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Gian-Italo Bischi: Università di Urbino “Carlo Bo”
Ferenc Szidarovszky: University of Arizona

Chapter Chapter 1 in Nonlinear Oligopolies, 2010, pp 1-49 from Springer

Abstract: Abstract In this chapter we will introduce the classical Cournot model, which is also known as the single-product quantity setting oligopoly model without product differentiation. In the first section of the chapter the Cournot model will be discussed as an N-firm static game and the best responses of the firms and the equilibria will be determined in a series of examples, many of which will be built upon in developing the ideas in subsequent chapters. Section 1.2 introduces the dynamic adjustment processes via which we shall assume that firms adjust output over time. We will in particular discuss expectation formation processes and adaptive adjustments and gradient adjustments. The final section will illustrate by simple examples the complexity of the dynamics that can arise in these models due to certain nonlinear features to be described below. The fundamental techniques for the global analysis of the dynamics of such models will be explained in Sect. 1.3.

Keywords: Nash Equilibrium; Adjustment Process; Interior Equilibrium; Boundary Equilibrium; Adjustment Speed (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-02106-0_1

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DOI: 10.1007/978-3-642-02106-0_1

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