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Inferior factor in Cournot oligopoly revisited

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  • Paolo Bertoletti
  • Pierre Mouche

Abstract

We reconsider the recent work by Okuguchi (J Econ 101:125–131, 2010 ) on (possibly asymmetric) Cournotian firms with two production factors, one being inferior for each firm. It is shown there that an increase in the price of the inferior factor does raise the equilibrium industry output. In addition of providing a simpler and more rigorous proof of that result, we generalize it to the case of technologies with $$s\ge 2$$ factors and also allow some firms not to use the inferior one. Copyright Springer-Verlag Wien 2014

Suggested Citation

  • Paolo Bertoletti & Pierre Mouche, 2014. "Inferior factor in Cournot oligopoly revisited," Journal of Economics, Springer, vol. 112(1), pages 85-90, May.
    • Handle: RePEc:kap:jeczfn:v:112:y:2014:i:1:p:85-90
    DOI: 10.1007/s00712-013-0342-8
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    References listed on IDEAS

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    1. William Novshek, 1985. "On the Existence of Cournot Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 85-98.
    2. Leon A Petrosyan & Nikolay A Zenkevich, 2016. "Game Theory," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 9824, August.
    3. Koji Okuguchi, 2010. "Inferior factor in Cournot oligopoly," Journal of Economics, Springer, vol. 101(2), pages 125-131, October.
    4. Paolo Bertoletti & Giorgio Rampa, 2013. "On inferior inputs and marginal returns," Journal of Economics, Springer, vol. 109(3), pages 303-313, July.
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    More about this item

    Keywords

    Inferior factor; Cournot equilibrium; Aggregate revenue concavity; D21; D43;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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