Non-Existence of Free-Entry Cournot Equilibrium: The Importance of Market Size and Technology Choice

11 Pages Posted: 16 Apr 2001

See all articles by Georg Götz

Georg Götz

University of Giessen - Department of Economics

Date Written: February 2001

Abstract

Free-entry Cournot equilibria in pure strategies often fail to exist even within a framework of linear demand and constant marginal costs, if firms can choose from a discrete set of technologies. I show that the non-existence problem vanishes if vertical market size is large. An example demonstrates that the existence problem is severe in the often considered case of a 'small' number of active firms.

Keywords: Cournot equilibrium, Existence, Market size

JEL Classification: D43, L13

Suggested Citation

Götz, Georg, Non-Existence of Free-Entry Cournot Equilibrium: The Importance of Market Size and Technology Choice (February 2001). Available at SSRN: https://ssrn.com/abstract=265218 or http://dx.doi.org/10.2139/ssrn.265218

Georg Götz (Contact Author)

University of Giessen - Department of Economics ( email )

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Germany
+49 641 99 22050 (Phone)
+49 641 99 19867 (Fax)

HOME PAGE: http://wiwi.uni-giessen.de/home/goetz/

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