Free Entry in a Cournot Market with Imperfectly Substituting Goods

Two results are shown about the free-entry equilibrium in a Cournot market with asymmetric firms and imperfectly substituting goods. First, only one technology will survive in the production of each good. Second, some good(s) may not be produced. Specifically, we show that in a two-good model only one good is produced if the substitution parameter is higher than a critical value and both goods are produced for smaller substitution parameter values.

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Year of publication:	2010
Authors:	Liu, Lin ; Wang, X. Henry
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 30.2010, 3, p. 1935-1941
Publisher:	AccessEcon
Subject:	Free-entry equilibrium \| Cournot competition \| substituting goods

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; D4 - Market Structure and Pricing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008560227