[P2P-F] theory of oligopoly (1838)

[Michel Bauwens]

thanks dante,

Michel

On Thu, Aug 11, 2011 at 12:53 PM, Dante-Gabryell Monson <
dante.monson at gmail.com> 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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