Computing cournot equilibrium through maximization over prices

Orbay, Hakan (2009) Computing cournot equilibrium through maximization over prices. Economic Letters, 105 (1). pp. 71-73. ISSN 0165-1765

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Official URL: http://dx.doi.org/10.1016/j.econlet.2009.06.001

Abstract

This paper presents an alternative characterization of internal Cournot equilibrium based on the first-order conditions corresponding to profit maximization over prices. This characterization is particularly useful when the market is described in terms of demand functions (rather than inverse-demand functions). A significant computational advantage is gained in homogeneous good cases as demand functions need not be inverted and simple first order conditions are obtained. In addition, this approach mimics price setting behavior and thus suggests a price competition interpretation of the Cournot game.

Item Type:	Article
Uncontrolled Keywords:	Cournot equilibrium
Subjects:	H Social Sciences > HB Economic Theory
ID Code:	13325
Deposited By:	Hakan Orbay
Deposited On:	04 Dec 2009 13:50
Last Modified:	17 Jul 2012 09:58

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Computing Cournot Equilibrium through Maximization over Prices. (deposited 12 Nov 2007 09:16)
- Computing cournot equilibrium through maximization over prices. (deposited 04 Dec 2009 13:50) [Currently Displayed]

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