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Free entry and stability in a cournot model

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  • Demange, Gabrielle

Abstract

In a Cournot model for a single homogeneous good, we study simultaneously two stability properties of a Cournot equilibrium: the stability of a continuous quantity adjustment process with a fixed number of firms and the stability relative to entry. Under usual assumptions, we show that these two properties are consistent--i.e., there exists an equilibrium that is stable in both senses--and determine quite sharply the number of active firms.
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  • Demange, Gabrielle, 1986. "Free entry and stability in a cournot model," Journal of Economic Theory, Elsevier, vol. 40(2), pages 283-303, December.
    • Handle: RePEc:eee:jetheo:v:40:y:1986:i:2:p:283-303
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    Cited by:

    1. Ikeda, Takeshi, 2007. "Does a tariff really enhance welfare?," Japan and the World Economy, Elsevier, vol. 19(2), pages 139-148, March.
    2. Jean J. Gabszewicz & Jacques-François Thisse, 2000. "Microeconomic theories of imperfect competition," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 47-99.
    3. Javier M. López-Cuñat, 1999. "One-stage and two-stage entry Cournot equilibria," Investigaciones Economicas, Fundación SEPI, vol. 23(1), pages 115-128, January.

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