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Perfectly competitive markets as the limits of Cournot markets

Novshek, William (1985) Perfectly competitive markets as the limits of Cournot markets. Journal of Economic Theory, 35 (1). pp. 72-82. ISSN 0022-0531. doi:10.1016/0022-0531(85)90062-6.

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A perfectly competitive, partial equilibrium market for a single homogeneous good with a (bounded) continuum of infinitesimal firms is considered. Cost functions are essentially unrestricted and are allowed to vary smoothly across firms. A sequence (net) of Cournot markets (each with a finite number of firms) which converge smoothly to the perfectly competitive limit in terms of both the inverse demand functions and the distributioon of firm technologies is introduced and it is shown that all markets sufficiently far along the sequence have a Cournot equilibrium and all the Cournot equilibria converge to the perfectly competitive equilibrium of the limit market.

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Additional Information:© 1985 Academic Press, Inc. Received November 15, 1983; revised May 11, 1984. This research was supported by National Science Foundation Grant SES79-25690 at the Institute for Mathematical Studies in the Social Sciences, Stanford University. Formerly SSWP 499.
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ID Code:83208
Deposited By: Jacquelyn Bussone
Deposited On:15 Nov 2017 23:09
Last Modified:15 Nov 2021 19:56

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