Search results
Results from the WOW.Com Content Network
Cournot's model of competition is typically presented for the case of a duopoly market structure; the following example provides a straightforward analysis of the Cournot model for the case of Duopoly. Therefore, suppose we have a market consisting of only two firms which we will call firm 1 and firm 2.
A Cournot duopoly is a model of strategic interaction between two firms where they simultaneously choose their output levels, assuming the rival's output level is fixed. The firms compete on quantity, and each firm attempts to maximize its profit given the other firm's output level.
The Cournot duopoly model developed in his book also introduced the concept of a (pure strategy) Nash equilibrium, the reaction function and best-response dynamics. Cournot believed that economists must utilize the tools of mathematics only to establish probable limits and to express less stable facts in more absolute terms.
For example, in the classic Cournot model of oligopoly, it is assumed that each firm treats the output of the other firms as given when it chooses its output. This is sometimes called the "Nash conjecture," as it underlies the standard Nash equilibrium concept.
Cournot quantity competition, one of the first models of oligopoly markets was developed by Augustin Cournot in 1835. In Cournot’s model, there are two firms and each firm selects a quantity to produce, and the resulting total output determines the market price. [9]
Built with Readymag—a tool to design anything on the web.
The model was formulated in 1883 by Bertrand in a review of Antoine Augustin Cournot's book Recherches sur les Principes Mathématiques de la Théorie des Richesses (1838) in which Cournot had put forward the Cournot model. [1] Cournot's model argued that each firm should maximise its profit by selecting a quantity level and then adjusting ...
Cournot, a professor of mathematics, developed a mathematical treatment in 1838 for duopoly—a market condition defined by competition between two sellers. [20] This treatment of competition, first published in Researches into the Mathematical Principles of Wealth, [21] is referred to as Cournot duopoly. It is assumed that both sellers had ...