Evolution of Conjectures in Cournot Oligopoly

Jacco Thijssen

Economic Papers from Trinity College Dublin, Economics Department

Abstract: This paper considers a dynamic market where a fixed number of firms engages in Cournot oligopoly. Firms choose the output level based on their assessment of the competitors' reaction to their output choice. This is parameterized using an approach reminiscent of conjectural variations. On a second level firms adapt their conjectural variation by imitating the most successful firm. Simulations suggest that in the long-run the Walrasian, Cournot-Nash and cartel equilibria survive. The theory of nearly-complete decomposability is used to show that the Walrasian equilibrium is approximately the only stochastically stable state.

JEL-codes: C73 L13 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tcd.ie/Economics/TEP/2003_papers/tepno16JT23.PDF (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:200316

Access Statistics for this paper

More papers in Economic Papers from Trinity College Dublin, Economics Department Contact information at EDIRC.
Bibliographic data for series maintained by Colette Angelov ().