On the Effects of Entry in Cournot Markets

Posted: 30 Jul 2000

See all articles by Rabah Amir

Rabah Amir

University of Arizona - Department of Economics; University of Arizona

Val E. Lambson

Brigham Young University - Department of Economics

Abstract

In the framework of symmetric Cournot oligopoly, this paper provides two minimal sets of assumptions on the demand and cost functions that imply respectively that, as the number of firms increases, the minimal and maximal equilibria lead to (i) decreasing industry price and increasing or decreasing per-firm output; and (ii) increasing industry price (and decreasing per firm output.) In both cases, per-firm profits are decreasing.

The analysis relies crucially on lattice-theoretic methods and yields general, unambiguous and easily interpretable conclusions of a global nature. As a byproduct of independent interest, new insight into the existence of Cournot equilibrium is developed.

JEL Classification: L13

Suggested Citation

Amir, Rabah and Lambson, Val Eugene, On the Effects of Entry in Cournot Markets. Review of Economic Studies, Vol. 67, No. 2, April 2000. Available at SSRN: https://ssrn.com/abstract=234813

Rabah Amir (Contact Author)

University of Arizona - Department of Economics ( email )

Tucson, AZ 85721
United States

University of Arizona ( email )

Department of History
Tucson, AZ 85721
United States

Val Eugene Lambson

Brigham Young University - Department of Economics ( email )

130 Faculty Office Bldg.
Provo, UT 84602-2363
United States
801-378-7765 (Phone)

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