thanks dante, Michel On Thu, Aug 11, 2011 at 12:53 PM, Dante-Gabryell Monson < [email protected]> wrote:
http://en.wikipedia.org/wiki/Nash_equilibrium#History
A version of the Nash equilibrium concept was first used by Antoine Augustin Cournot <http://en.wikipedia.org/wiki/Antoine_Augustin_Cournot> in his theory of oligopoly (1838). In Cournot's theory, firms choose how much output to produce to maximize their own profit. However, the best output for one firm depends on the outputs of others. A Cournot equilibrium<http://en.wikipedia.org/wiki/Cournot_equilibrium> occurs when each firm's output maximizes its profits given the output of the other firms, which is a pure strategy<http://en.wikipedia.org/wiki/Pure_strategy> Nash Equilibrium.
http://en.wikipedia.org/wiki/Cournot_equilibrium
It has the following features:
- There is more than one firm and all firms produce a homogeneous<http://en.wiktionary.org/wiki/Homogeneous> product <http://en.wikipedia.org/wiki/Product_%28business%29>, i.e. there is no product differentiation<http://en.wikipedia.org/wiki/Product_differentiation> ; - Firms do not cooperate, i.e. there is no collusion<http://en.wikipedia.org/wiki/Collusion> ; - Firms have market power <http://en.wikipedia.org/wiki/Market_power>, i.e. each firm's output decision affects the good's price; - The number of firms is fixed; - Firms compete in quantities, and choose quantities simultaneously; - The firms are economically rational and act strategically<http://en.wikipedia.org/wiki/Game_theory>, usually seeking to maximize profit given their competitors' decisions.
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