Cournot, Bertrand or Chamberlin: Toward a Reconciliation

Mathieu Parenti (), Alexander Sidorov (), Jacques Thisse and Evgeny Zhelobodko

No 2016005, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The purpose of this paper is to provide a comparison of three types of competition in a differentiated industry: Cournot, Bertrand, and monopolistic competition. This is accomplished in an economy involving one sector and a population of consumers endowed with separable preferences and a given number of labor units. When firms are free to enter the market, monopolistically competitive firms charge lower prices than oligopolistic firms, while the mass of varieties provided by the market is smaller under the former than the latter. If the economy is sufficiently large, Cournot, Bertrand and Chamberlin solutions converge toward the same market outcome, which may be a competitive or a monopolistically competitive equilibrium, depending on the nature of preferences.

Keywords: Cournot competition; Bertrand competition; monopolistic competition; free entry (search for similar items in EconPapers)
JEL-codes: D41 D43 F12 L13 (search for similar items in EconPapers)
Date: 2016-04-06
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Related works:
Journal Article: Cournot, Bertrand or Chamberlin: Toward a reconciliation (2017)
Working Paper: Cournot, Bertrand or Chamberlin: toward a reconciliation (2017)
Working Paper: Cournot, Bertrand or Chamberlin: Toward a reconciliation (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2016005

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