Comparative Statics in Free Entry Cournot Equilibrium

I. Fradera and Luis Corchon

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We study the effects of a change in some exogenous variable (the fixed cost or a parameter in the payoff functions) on the strategies played in a Symmetric Cournot Equilibrium with Free Entry (SCEFE). We also show that any observation on prices, profits and number of firms is compatible with the assumption that the market under consideration is a SCEFE. Therefore, in this model, there is no direct link between profitability and the number of active firms.

Keywords: PRICING; ECONOMIC MODELS; ENTERPRISES (search for similar items in EconPapers)
JEL-codes: D21 D40 (search for similar items in EconPapers)
Pages: 24 pages
Date: 1996
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:324.96

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