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From Bertrand to Cournot via Kreps and Scheinkman: a hazardous journey

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  • WAUTHY, Xavier Y.

    (CEREC, Université Saint-Louis, B-1000 Brussels, Belgium; Université catholique de Louvain, CORE, Belgium)

Abstract

The mininal core of strategic decisions a firm has to make is three-fold: What to produce? At which scale? At what price? A full-fledged theory of oligopolistic competition should be able to embrace these three dimensions jointly. Starting from the Cournot-Bertrand dispute and the stream of research it gave birth to, this survey shows that we are far from having such a theory at our disposal today. Many papers cover two dimensions out of three and display insightful results but no paper satisfactorily addresses the complete picture. I discuss the limitations of the different approaches that have been undertaken. This discussion sets a clear agenda for further theoretical research on the oligopoly front.

Suggested Citation

  • WAUTHY, Xavier Y., 2014. "From Bertrand to Cournot via Kreps and Scheinkman: a hazardous journey," LIDAM Discussion Papers CORE 2014026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2014026
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2014.html
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    References listed on IDEAS

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    More about this item

    Keywords

    Bertrand; Cournot; Edgeworth; product differentiation; capacity constraints;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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