On the existence of Bayesian Cournot equilibrium

Ezra Einy; Ori Haimanko; Diego Moreno; Benyamin Shitovitz

doi:10.1016/j.geb.2009.06.002

On the existence of Bayesian Cournot equilibrium

Ezra Einy, Ori Haimanko, Diego Moreno, Benyamin Shitovitz

Department of Economics

Research output: Contribution to journal › Article › peer-review

27 Scopus citations

Abstract

We show that when firms have incomplete information about the market demand and their costs, a (Bayesian) Cournot equilibrium in pure strategies may not exist, or be unique. In fact, we are able to construct surprisingly simple and robust examples of duopolies with these features. However, we also find some sufficient conditions for existence, and for uniqueness, of Cournot equilibrium in a certain class of industries. More general results arise when negative prices are possible.

Original language	English
Pages (from-to)	77-94
Number of pages	18
Journal	Games and Economic Behavior
Volume	68
Issue number	1
DOIs	https://doi.org/10.1016/j.geb.2009.06.002
State	Published - 1 Jan 2010

Keywords

Bayesian
Cournot
Equilibrium
Existence
Incomplete information
Oligopoly
Uniqueness

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.geb.2009.06.002

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title = "On the existence of Bayesian Cournot equilibrium",

abstract = "We show that when firms have incomplete information about the market demand and their costs, a (Bayesian) Cournot equilibrium in pure strategies may not exist, or be unique. In fact, we are able to construct surprisingly simple and robust examples of duopolies with these features. However, we also find some sufficient conditions for existence, and for uniqueness, of Cournot equilibrium in a certain class of industries. More general results arise when negative prices are possible.",

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author = "Ezra Einy and Ori Haimanko and Diego Moreno and Benyamin Shitovitz",

note = "Funding Information: ✩ Ori Haimanko is grateful to the Japanese Society for the Promotion of Science (JSPS) for the support of the JSPS Invitation Fellowship program in Hitotsubashi University. He also thanks the Institute of Economic Research, Kyoto University, for accommodating his visits during the preparation of parts of this work. Diego Moreno gratefully acknowledges financial support of the Spanish Ministry of Education, grant SEJ2007-67436. * Corresponding author at: Department of Economics, Ben Gurion University of the Negev, Beer Sheva 84105, Israel. E-mail addresses: [email protected], [email protected] (E. Einy), [email protected] (O. Haimanko), [email protected] (D. Moreno), [email protected] (B. Shitovitz).",

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AU - Einy, Ezra

AU - Haimanko, Ori

AU - Moreno, Diego

AU - Shitovitz, Benyamin

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AB - We show that when firms have incomplete information about the market demand and their costs, a (Bayesian) Cournot equilibrium in pure strategies may not exist, or be unique. In fact, we are able to construct surprisingly simple and robust examples of duopolies with these features. However, we also find some sufficient conditions for existence, and for uniqueness, of Cournot equilibrium in a certain class of industries. More general results arise when negative prices are possible.

KW - Bayesian

KW - Cournot

KW - Equilibrium

KW - Existence

KW - Incomplete information

KW - Oligopoly

KW - Uniqueness

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On the existence of Bayesian Cournot equilibrium

Abstract

Keywords

ASJC Scopus subject areas

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