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Cournotian duopolistic firms may be Walrasian: a case in the Gabszewicz and Vial model

Author

Listed:
  • Francesca Busetto

    (Università degli Studi di Udine)

  • Giulio Codognato

    (Università degli Studi di Udine
    Economix, UPL, Univ Paris Nanterre, CNRS)

  • Giorgia Pavan

    (Università degli Studi di Udine)

  • Simone Tonin

    (Università degli Studi di Udine)

Abstract

In this paper, we present a refreshed version of the original model proposed by Gabszewicz and Vial (J Econ Theory 4:381–400, 1972) and we use their main example to review the main theoretical issues related to the notion of Cournot-Walras equilibrium. We compute, in the Gabszewicz and Vial main example, two different Cournot-Walras equilibria associated with different normalization rules. Moreover, in the same example, we compute a Utility-Cournot-Walras equilibrium as defined by Grodal (in: Allen (ed) Economics in a changing world, Macmillan, London, 1996) and we show that it coincides with the unique Walras equilibrium. Furthermore, using a proposition proved by Grodal (1996), we build a normalization rule with respect to which there is a Cournot-Walras equilibrium that coincides with the Utility-Cournot-Walras equilibrium and hence with the unique Walras equilibrium. To the best of our knowledge, this example provides the first case of Cournotian duopolistic firms being Walrasian in a production economy.

Suggested Citation

  • Francesca Busetto & Giulio Codognato & Giorgia Pavan & Simone Tonin, 2023. "Cournotian duopolistic firms may be Walrasian: a case in the Gabszewicz and Vial model," Journal of Economics, Springer, vol. 140(2), pages 121-140, October.
    • Handle: RePEc:kap:jeczfn:v:140:y:2023:i:2:d:10.1007_s00712-023-00830-1
    DOI: 10.1007/s00712-023-00830-1
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Cournot-Walras equilibrium; Walras equilibrium; Price normalization; Profit maximization;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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