Aggregation with Cournot competition: the Le Chatelier Samuelson principle

Bertrand Koebel and Francois Laisney

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the aggregate substitution and expansion effects triggered by changes in input prices in a context where firms supply a homogeneous commodity and compete in quantities à la Cournot. We derive a sufficient condition for the existence of a Cournot equilibrium and show that this condition also ensures that the Le Chatelier-Samuelson principle is satisfied in the aggregate at the Cournot equilibrium, although it may not be satisfied at the firm level.

Keywords: Aggregation; returns to scale; market power; markup; own-price elasticity. (search for similar items in EconPapers)
JEL-codes: D21 D43 (search for similar items in EconPapers)
Date: 2014-12-09
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Aggregation with Cournot Competition: the Le Chatelier Samuelson Principle (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:60476

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