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Cournot Competition, Organization and Learning

Author

Listed:
  • Ray Barrell

    (NIESR - Research Centre of the National Institute of Economic and Social Research - National Institute of Economic and Social Research)

  • Francesco Saraceno

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

We model firms' output decisions in a repeated duopoly frameworkfocusing on three interrelated issues: (1) the role of learningin the adjustment process toward equilibrium, (2) the role of organizationalstructure in the firm's decision making, and (3) the role ofchanging environmental conditions on learning and output decisions.We characterize the firm as a type of artificial neural network, whichmust estimate its optimal output decision based on signals it receivesfrom the economic environment (which influences the demand function).Via simulation analysis we show: (1) how organizations learn toestimate the optimal output over time as a function of the environmentaldynamics; (2) which networks are optimal for each environmentalcomplexity, and (3) the equilibrium industry structure.

Suggested Citation

  • Ray Barrell & Francesco Saraceno, 2005. "Cournot Competition, Organization and Learning," Post-Print hal-03597732, HAL.
    • Handle: RePEc:hal:journl:hal-03597732
    DOI: 10.1016/j.jedc.2003.07.003
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    Citations

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    Cited by:

    1. Chang, Myong-Hun & Harrington, Joseph Jr., 2006. "Agent-Based Models of Organizations," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 26, pages 1273-1337, Elsevier.
    2. Jason Barr & Francesco Saraceno, 2005. "Modeling the Firm as an Artificial Neural Network," Working Papers Rutgers University, Newark 2005-011, Department of Economics, Rutgers University, Newark.
    3. Francesco Saraceno & Jason Barr, 2008. "Cournot competition and endogenous firm size," Journal of Evolutionary Economics, Springer, vol. 18(5), pages 615-638, October.
    4. Fioretti, Guido, 2006. "Recognising investment opportunities at the onset of recoveries," Research in Economics, Elsevier, vol. 60(2), pages 69-84, June.
    5. Barr, Jason & Saraceno, Francesco, 2009. "Organization, learning and cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 39-53, May.
    6. repec:spo:wpecon:info:hdl:2441/9832 is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/9832 is not listed on IDEAS
    8. repec:hal:spmain:info:hdl:2441/6782 is not listed on IDEAS
    9. Sgroi, Daniel & Zizzo, Daniel John, 2009. "Learning to play 3×3 games: Neural networks as bounded-rational players," Journal of Economic Behavior & Organization, Elsevier, vol. 69(1), pages 27-38, January.
    10. James Fain, 2023. "Should retail stores locate close to a rival?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(1), pages 129-162, January.
    11. Malcolm Brady, 2021. "A Game-Theoretic Model of Strategic Interaction Using Advertising: Simulating the Evolution of the Cournot Nash Equilibrium under Different Competitive Scenarios," Games, MDPI, vol. 12(4), pages 1-16, November.
    12. repec:hal:wpspec:info:hdl:2441/9832 is not listed on IDEAS
    13. repec:spo:wpecon:info:hdl:2441/6782 is not listed on IDEAS
    14. Steven Kimbrough & Frederic Murphy, 2009. "Learning to Collude Tacitly on Production Levels by Oligopolistic Agents," Computational Economics, Springer;Society for Computational Economics, vol. 33(1), pages 47-78, February.
    15. repec:spo:wpmain:info:hdl:2441/9832 is not listed on IDEAS
    16. repec:hal:wpspec:info:hdl:2441/6782 is not listed on IDEAS
    17. Francesco Saraceno & Jason Barr, 2008. "Cournot competition and endogenous firm size," Journal of Evolutionary Economics, Springer, vol. 18(5), pages 615-638, October.
    18. repec:spo:wpmain:info:hdl:2441/6782 is not listed on IDEAS
    19. Silveira, Douglas & Vasconcelos, Silvinha, 2020. "Essays on duopoly competition with asymmetric firms: Is profit maximization always an evolutionary stable strategy?," International Journal of Production Economics, Elsevier, vol. 225(C).
    20. A. A. Elsadany & A. M. Awad, 2016. "Dynamical analysis and chaos control in a heterogeneous Kopel duopoly game," Indian Journal of Pure and Applied Mathematics, Springer, vol. 47(4), pages 617-639, December.

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