On a Discontinuous Cournot Oligopoly

Ferenc Szidarovszky () and Akio Matsumoto
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Ferenc Szidarovszky: University of Pécs

A chapter in Equilibrium Theory for Cournot Oligopolies and Related Games, 2016, pp 101-118 from Springer

Abstract: Abstract A modified Cournot oligopoly is introduced and examined in which the firms can treat their wastes up to a certain amount, and if the amount of waste is even higher then an outside facility is used with a given fixed cost and higher unit cost. The resulting payoff functions become discontinuous. The best response functions of firms are nonincreasing and also might be discontinuous. The best response functions can be modified to depend on the total industry output, which also might be discontinuous as well as multiple valued. The existence of at least one equilibrium is proved and numerical examples show the possibility of a unique equilibrium as well as that of multiple equilibria.

Keywords: Payoff Function; Fixed Cost; Strict Inequality; Multiple Equilibrium; Unique Equilibrium (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/978-3-319-29254-0_8

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