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Free-Entry and Stability in a Cournot Model

Author

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  • Gabrielle Demange

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique)

Abstract

In a Cournot model for a single homogeneous good, we study simultaneously two stability properties of a Cournot equilibrium: the stability of a continuous quantity adjustment process with a fixed number of firms and the stability relative to entry. Under usual assumptions, we show that these two properties are consistent--i.e., there exists an equilibrium that is stable in both senses--and determine quite sharply the number of active firms.

Suggested Citation

  • Gabrielle Demange, 1986. "Free-Entry and Stability in a Cournot Model," Post-Print halshs-00670983, HAL.
    • Handle: RePEc:hal:journl:halshs-00670983
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    Cited by:

    1. Ikeda, Takeshi, 2007. "Does a tariff really enhance welfare?," Japan and the World Economy, Elsevier, vol. 19(2), pages 139-148, March.
    2. Jean J. Gabszewicz & Jacques-François Thisse, 2000. "Microeconomic theories of imperfect competition," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 47-99.
    3. Javier M. López-Cuñat, 1999. "One-stage and two-stage entry Cournot equilibria," Investigaciones Economicas, Fundación SEPI, vol. 23(1), pages 115-128, January.

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