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Reconciling Cournot and Bertrand Outcomes: A Review

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  • Kirui, Benard Kipyegon

Abstract

This paper reconciles the Cournot and Bertrand Models of oligopolistic competition, highlighting its weaknesses and giving an opinion thereafter. The pertinent question in this paper is why Cournot (1838) ignored the price and Bertrand (1883) ignored the quantity? From the review, the main conclusion of this paper is that oligopoly competition is guided in the long run by production capacity competition, as advocated by Cournot, equilibrated through price competition in the short run, as advocated by Bertrand.

Suggested Citation

  • Kirui, Benard Kipyegon, 2013. "Reconciling Cournot and Bertrand Outcomes: A Review," EconStor Preprints 97305, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:97305
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    File URL: https://www.econstor.eu/bitstream/10419/97305/1/RECONCILING%20COURNOT%20AND%20BERTRAND%20OUTCOMES-%20A%20REVIEW.pdf
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    References listed on IDEAS

    as
    1. Boccard, N. & Wauthy, Xavier, 1996. "The Hotelling Model with Capacity Precommitment," LIDAM Discussion Papers IRES 1997030, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Nov 1997.
    2. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    3. Paolo Buccirossi, 2001. "Price competition and probabilistic demand yield the Cournot outcome, the Bertrand outcome, and much more," Working Papers in Public Economics 41, Department of Economics and Law, Sapienza University of Roma.
    4. Boccard, Nicolas & Wauthy, Xavier, 2000. "Bertrand competition and Cournot outcomes: further results," Economics Letters, Elsevier, vol. 68(3), pages 279-285, September.
    5. Arijit Mukherjee & Udo Broll & Soma Mukherjee, 2012. "Bertrand Versus Cournot Competition In A Vertical Structure: A Note," Manchester School, University of Manchester, vol. 80(5), pages 545-559, September.
    6. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    7. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Cournot Competition; Bertrand Competition; Oligopoly; equilibrium;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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