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The Cournot competition is an economic model in which competing firms choose a quantity to produce independently and simultaneously. Meaning of duopole in the French dictionary with examples of use. Synonyms for duopole This theory was established by Antoine-Augustin Cournot in Article détaillé: Duopole de Cournot. Les hypothèses de l’analyse de Cournot sont: Chaque firme considère.

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Cournot Duopoly

The market price is set at a level such that demand equals the total quantity produced by all firms. Each firm takes the quantity set by its competitors as a given, evaluates its residual demand, and then behaves as a monopoly. Discuss Proposed since January This result can be generalized to the case of firms with different cost structures under appropriate restrictions and non-linear demand. Please help improve this article by adding citations to reliable sources.

This section presents an analysis of the model with 2 firms and constant marginal cost.

These are the firms’ best response functions. Arrow’s impossibility theorem Aumann’s agreement theorem Folk theorem Minimax theorem Nash’s theorem Purification theorem Revelation principle Zermelo’s theorem. When the market is characterized by fixed costs of production, however, we can endogenize the number of competitors imagining that firms enter in the market until their profits are zero.

Price is a commonly known decreasing function of total output. The market price is pushed to marginal cost level. By using this site, you agree to the Terms of Use and Privacy Policy.

From Wikipedia, the free duopo,e. Simple models of competitionpage 6, Dept. This page was last edited on 7 Decemberat All-pay auction Alpha—beta pruning Bertrand paradox Bounded rationality Combinatorial game theory Confrontation analysis Coopetition First-move advantage in chess Game mechanics Glossary of game theory List of game theorists List of games in game duoppole No-win situation Solving chess Topological game Tragedy of the commons Tyranny of small decisions.


Economics models Non-cooperative games Competition economics Oligopoly. To calculate the Nash equilibrium, the best response functions of the firms must first be calculated.

Normally the cost functions are treated as common knowledge. The cost functions may be the same or different among firms.

Meaning of “duopole” in the French dictionary

Articles needing additional references from October All articles needing additional references Articles to be cuornot from January All articles to be merged.

Topics in game theory. Equilibrium prices will be:. The state of equilibrium With linear demand and identical, constant marginal cost the equilibrium values are as follows:. The consequence of this is that in equilibrium, each firm’s expectations of how other firms will act are shown to be correct; when all is revealed, no firm wants to change its output decision.

It has been suggested that Complementary monopoly be merged into this article. Unsourced cournnot may be challenged and removed. Hence with many firms a Cournot market approximates a perfectly competitive market.

October Learn how and when to remove this template message. Cooperative game Determinacy Escalation of commitment Extensive-form game First-player and second-player win Game complexity Graphical game Hierarchy of beliefs Information set Normal-form game Preference Ds game Simultaneous game Simultaneous action selection Solved game Succinct game. An essential assumption of duoppole model is the “not conjecture” that each firm aims to maximize profits, based on the expectation that its own output decision will not have an effect on the decisions of its rivals.

Retrieved from ” https: Antoine Augustin Cournot first outlined his theory of competition in his volume Recherches sur les Principes Mathematiques de la Theorie des Richesses as a way of describing the competition with a market for spring water dominated by two suppliers a duopoly. Suppose the industry has the following price structure: This equilibrium is usually known as Cournot equilibrium with endogenous entry, or Marshall equilibrium. This article needs additional citations for verification.


In Nash equilibria, both firms will be playing best responses so solving the above equations simultaneously. Cournot competition is an economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same courhot.

The Cournot Theorem then states that, in absence of fixed costs of production, as the number of firms in the market, Ngoes to infinity, market output, Nqgoes to the competitive level and the price converges to marginal cost. Revenue is the product of price and quantity and cost is given by the firm’s cost function, so profit is as described above: Nash equilibrium Duooole perfection Mertens-stable equilibrium Bayesian Nash equilibrium Perfect Bayesian equilibrium Trembling hand Proper equilibrium Epsilon-equilibrium Correlated equilibrium Sequential equilibrium Quasi-perfect equilibrium Evolutionarily stable strategy Risk dominance Core Shapley value Pareto efficiency Gibbs equilibrium Quantal response equilibrium Self-confirming equilibrium Strong Nash equilibrium Markov perfect equilibrium.

Cournot Duopoly

However, as the number of firms increases towards infinity, the Cournot model gives the same result as in Bertrand model: The profit of firm i is revenue minus cost. Views Read Edit View history.

It is named after Antoine Augustin Cournot — who was inspired by observing competition in d spring water duopoly.