Computing Cournot Equilibrium through Maximization over Prices

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.

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