Expectations and Stability in Oligopoly Models

  • Koji Okuguchi

Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 138)

Table of contents

  1. Front Matter
    Pages I-VI
  2. Koji Okuguchi
    Pages 1-3
  3. Koji Okuguchi
    Pages 39-45
  4. Koji Okuguchi
    Pages 46-55
  5. Koji Okuguchi
    Pages 82-88
  6. Koji Okuguchi
    Pages 89-98
  7. Back Matter
    Pages 99-106

About this book

Introduction

Ever since A.C.Cournot(1838), economists have been increasingly interested in oligopoly, a state of industry where firms producing homogeneous goods or close substitutes are limited in number. The fewness of firms in oligopoly gives rise to interdependence which they have to take into account in choosing their optimal output or pricing policies in each production period. Since each firm's profit is a function of all firms' outputs in an oligopoly without product differ­ entiation, each firm in choosing its optimal output in any period has to know beforehand all other rival firms' outputs in the same period. As this is in general impossible, it has to form some kind of expecta­ tion on other firms' most likely outputs. Cournot thought that in each period each firm assumed that all its rivals' outputs would remain at the same level as in the preceding period. Needless to say, the Cournot assumption is too naive to be realistically supported. However, the Cournot profit maximizing oligopoly model characterized by this assumption has many important and attractive properties from the view­ point of economic theory and provides a frame of reference for more realistic theories of oligopoly. In Chapters 1-3, we shall be engaged in analyzing the Cournot oligopoly model in greater detail from the viewpoints of existence, stability, uniqueness and quasi-competitive­ ness of the equilibrium.

Keywords

Stability calculus function proof theorem

Authors and affiliations

  • Koji Okuguchi
    • 1
  1. 1.Department of EconomicsTokyo Metropolitan UniversityMeguro-ku, TokyoJapan

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-642-46347-1
  • Copyright Information Springer-Verlag Berlin Heidelberg 1976
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Springer Book Archive
  • Print ISBN 978-3-540-08056-5
  • Online ISBN 978-3-642-46347-1
  • Series Print ISSN 0075-8442
  • About this book