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On the Existence of Cournot Equilibrium

Novshek, William (1984) On the Existence of Cournot Equilibrium. Social Science Working Paper, 517. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper examines the existence of n-firm Cournot equilibrium in a market for a single homogeneous commodity. It proves that if each firm's marginal revenue declines as the aggregate output of other firms increases (which is implied by concave inverse demand) then a Cournot equilibrium exists, without assuming that firms have nondecreasing marginal cost or identical technologies. Also, if the marginal revenue condition fails at a "potential optimal point," there is a set of firms such that no Cournot equilibrium exists. The paper also contains an example of nonexistence with two nonidentical firms, each with constant returns to scale production.

Item Type:Report or Paper (Working Paper)
Additional Information:This research was supported by National Science Foundation Grant SES 79-25690 at the Institute for Mathematical Studies in the Social Sciences, Stanford University. This is a revision of IMSSS Technical report 420. I am grateful to participants in the USC Modeling Research Group Economic Theory seminar and the UCLA Mathematical Economics Theory Workshop for their comments. All errors are my own. Published as Novshek, William. "On the existence of Cournot equilibrium." The Review of Economic Studies 52.1 (1985): 85-98.
Group:Social Science Working Papers
Funding AgencyGrant Number
Subject Keywords:Cost functions, Economic theory, Marginal revenue, Market equilibrium, Demand, Existence theorems, Average cost, Marginal costs, Nonexistence, Nash equilibrium
Series Name:Social Science Working Paper
Issue or Number:517
Record Number:CaltechAUTHORS:20170920-133247687
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81627
Deposited By: Jacquelyn Bussone
Deposited On:20 Sep 2017 20:45
Last Modified:03 Oct 2019 18:45

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