What Is the Cournot Model?
The Cournot model is also called the Cournot duopoly model, or Duopoly model. The Cournot model is an early oligopoly model. It was proposed by French economist Cournot in 1838. Cournot model is the earliest version of Nash equilibrium application. Cournot model is usually used as the starting point of oligopoly theory analysis. The conclusion of the Cournot model can be easily generalized to the case of three or more oligopolistic manufacturers.
Cournot Model
- Cournot model was developed by French economists
- The Cournot model analyzes two marginal production costs that sell the same product.
- A manufacturer's
- Assuming that the two oligarchs produce products that can be replaced with each other at a fixed cost of 40 yuan each, and assuming that there is no variable cost,
- The conclusions of the above two-headed Cournot model can be generalized. Let the number of oligopoly manufacturers be m, then the general conclusion can be obtained as follows:
- Cournot Model of Price Competition
- Equilibrium total output of the industry = total market capacity · m / (m + 1)
- The flaw of the Cournot model is that it assumes that the competitor does not change output.