A Nonparametric Analysis of the Cournot Model

Andres Carvajal and John Quah
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Andres Carvajal: CRETA and Department of Economics, University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: An observer makes a number of observations of an industry producing a homogeneous good. Each observation consists of the market price, the output of individual rms and perhaps information on each rm's production cost. We provide various tests (typically, linear programs) with which the observer can determine if the data set is consistent with the hypothesis that rms in this industry are playing a Cournot game at each observation. When cost information is wholly or partially unavailable, these tests could potentially be used to derive cost information on the rms. This paper is a contribution to the literature that aims to characterize (in various contexts) the restrictions that a data set must satisfy for it to be consistent with Nash outcomes in a game. It is also inspired by the seminal result of Afriat (and the subsequent literature) which addresses similar issues in the context of consumer demand, though one important technical di erence from most of these results is that the objective functions of rms in a Cournot game are not necessarily quasiconcave. Keywords:

Date: 2009
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: A Nonparametric Analysis of the Cournot Model (2009)
Working Paper: A Nonparametric Analysis of the Cournot Model (2009)
Working Paper: A Nonparametric Analysis of the Cournot Model (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:922

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