Statistical Moments Analysis of Production and Profits in Multi-Product Cournot Oligopoly

David Hennessy and Harvey Lapan

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Our context involves N firms producing M products at constant marginal costs, and behaving as Cournot oligopolists. When preferences are quasi-linear, we study the relationships between second moments of unit costs and second moments of firm-level production. Larger variance in unit costs of a product increases own output variance and variance of any other output. We also investigate how second moments of unit costs affect the first and second moments of profit across firms. Larger variance in unit costs can reduce profit variance, even for a single product oligopoly.

Date: 2005-11-08
New Economics Papers: this item is included in nep-agr, nep-eff and nep-ind
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Published in International Journal of Industrial Organization, March 2008, vol. 26, pp. 598-606

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:12471

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