Cournot Games with Biconcave Demand
University of Zurich Working Paper No. 16
26 Pages Posted: 16 Sep 2009 Last revised: 29 Jan 2014
Date Written: January 2014
Abstract
Biconcavity is a simple condition on inverse demand that corresponds to the ordinary concept of concavity after simultaneous parameterized transformations of price and quantity. The notion is employed here in the framework of the homogeneous-good Cournot model with potentially heterogeneous firms. The analysis leads to unified conditions, respectively, for the existence of a pure-strategy equilibrium via nonincreasing best-response selections, for existence via quasiconcavity, and for uniqueness of the equilibrium. The usefulness of the generalizations is illustrated in cases where inverse demand is either "nearly linear" or isoelastic. It is also shown that commonly made assumptions regarding large outputs are often redundant.
Keywords: Cournot games, existence and uniqueness of a pure-strategy Nash equilibrium, generalized concavity, supermodularity
JEL Classification: C72, L13, C62
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Mixed Equilibria in Games of Strategic Complements are Unstable
By Federico Echenique and Aaron S. Edlin
-
Supermodularity and Complementarity in Economics: An Elementary Survey
By Rabah Amir
-
The Effects of Merger Synergies on Consumers of Differentiated Products
By Gregory J. Werden, Luke M. Froeb, ...
-
The Effects of Merger Efficiencies on Consumers of Differentiated Products
By Gregory J. Werden, Luke M. Froeb, ...
-
Ordinal Versus Cardinal Complementarity: The Case of Cournot Oligopoly
By Rabah Amir
-
By Rabah Amir, Filomena Garcia, ...