Quasi-Competitive Cournot Oligopoly with Product Differentiation and Symmetric Firms

Since <link rid="b10">Vives (1984</link>), <link rid="b1">Cheng (1985</link>) and <link rid="b7">Okuguchi (1987</link>), the equilibria in Bertrand and Cournot oligopolies with product differentiation have been known to differ. <link rid="b8">Okuguchi (2005</link>) has shown that Bertrand price-adjusting oligopoly with product differentiation and symmetric firms is quasi-competitive but not perfectly competitive in the limit state of infinite number of firms. This paper formulates and analyzes two types of Cournot output-adjusting oligopoly with product differentiation and symmetric firms, in one of which symmetric firms producing the same goods are assumed to collude, and in the other, collusion is ruled out. The limit states are shown to be different in two oligopolies but they are both quasi-competitive. Copyright © 2007 The Author; Journal compilation © 2007 Blackwell Publishing Ltd.