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Constant Best-Response Functions: Interpreting Cournot

Author

Listed:
  • Zivan Forshner

    (Department of Economics, University of Haifa, Israel)

  • Oz Shy

    (Research Department, Federal Reserve Bank of Boston, U.S.A.)

Abstract

Following Amir and Grilo (1999), we characterize a class of demand functions that generate constant quantity best-response functions. We examine implications of constant best-response functions for the invariance of equilibrium outcomes with respect to the assumed market structure of quantity games. We argue that, unlike the class of linear demand functions, this class of demand functions supports the pure interpretation of Cournot conjectures.

Suggested Citation

  • Zivan Forshner & Oz Shy, 2009. "Constant Best-Response Functions: Interpreting Cournot," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 8(1), pages 1-6, April.
    • Handle: RePEc:ijb:journl:v:8:y:2009:i:1:p:1-6
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    References listed on IDEAS

    as
    1. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    2. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
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    Cited by:

    1. Jong-Shin Wei, 2013. "On Teaching Price Elasticity of Demand and Change in Revenue due to Price Change -- A Synthesis with and without Calculus," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 12(1), pages 1-14, June.
    2. David R. Kamerschen, 2009. "The Economic Effect of the Graying of the Population," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 8(1), pages 87-89, April.

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    More about this item

    Keywords

    constant best-response functions; Cournot equilibrium; Cournot conjectures; Stackelberg equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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