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Free Entry in a Cournot Market with Imperfectly Substituting Goods

Author

Listed:
  • Lin Liu

    (University of Southern California)

  • X. Henry Wang

    (University of Missouri-Columbia)

Abstract

Two results are shown about the free-entry equilibrium in a Cournot market with asymmetric firms and imperfectly substituting goods. First, only one technology will survive in the production of each good. Second, some good(s) may not be produced. Specifically, we show that in a two-good model only one good is produced if the substitution parameter is higher than a critical value and both goods are produced for smaller substitution parameter values.

Suggested Citation

  • Lin Liu & X. Henry Wang, 2010. "Free Entry in a Cournot Market with Imperfectly Substituting Goods," Economics Bulletin, AccessEcon, vol. 30(3), pages 1935-1941.
    • Handle: RePEc:ebl:ecbull:eb-10-00341
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I3-P176.pdf
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    Citations

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    Cited by:

    1. Haiwen Zhou, 2023. "Impact of international trade under dual labor markets," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 917-934, October.
    2. Haiwen Zhou, 2021. "Fixed Costs and the Division of Labor," Annals of Economics and Finance, Society for AEF, vol. 22(1), pages 63-81, May.
    3. Lei Wen & Haiwen Zhou, 2023. "The choice of technology in economic development," Australian Economic Papers, Wiley Blackwell, vol. 62(4), pages 747-763, December.
    4. Haiwen Zhou, 2020. "Monitoring Intensity and Technology Choice in a Model of Unemployment," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(3), pages 504-520, June.
    5. Lei Wen & Haiwen Zhou, 2020. "Technology Choice, Financial Sector and Economic Integration Under the Presence of Efficiency Wages," Open Economies Review, Springer, vol. 31(1), pages 95-112, February.
    6. Haiwen Zhou & Ruhai Zhou, 2023. "Shirking and capital accumulation under oligopolistic competition," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 51(2), pages 394-407, September.
    7. Christopher Colburn & Haiwen Zhou, 2022. "The partition of production between households and markets," International Studies of Economics, John Wiley & Sons, vol. 17(1), pages 21-35, June.

    More about this item

    Keywords

    Free-entry equilibrium; Cournot competition; substituting goods;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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