Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty

If Cournot oligopolists face uncertainty about the intercept of a linear demand function and if the realized market price must be non-negative, then expected demand becomes convex, which can create a multiplicity of equilibria. This note shows that if the distribution of the demand intercept has a monotone hazard rate and if another, rather weak, assumption is satisfied, then uniqueness of equilibrium is guaranteed.

MoreLess

Year of publication:	2006
Authors:	Lagerlöf, Johan
Published in:	Topics in Theoretical Economics. - Berkeley Electronic Press. - Vol. 6.2006, 1, p. 1333-1333
Publisher:	Berkeley Electronic Press
Subject:	Cournot model \| non-negativity constraint \| demand uncertainty \| unique equilibrium

More details

Extent:	application/pdf
Type of publication:	Article
Notes:	oai:bepress:bejte-1333
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005046375