Conjectural Equilibria

  • F. H. Hahn
Part of the The New Palgrave book series (NPA)


In an economy with very many agents the market environment of any one of these is independent of the market actions he decides upon. More generally one can characterize an economy as perfectly competitive if the removal of any one agent from the economy would leave the remaining agents just as well off as they were before his removal. (The economy is said to satisfy a ‘no surplus’ condition; see Makowski, 1980; and Ostroy, 1980.) When an economy is not perfectly competitive, an agent in making a decision must take note of its effect on his market environment, for example, the price at which he can sell. This effect may not be known (or known with certainty) and will therefore be the subject of conjecture. A conjecture differs from expectations concerning future market environments which may, say, be generated by some stochastic process. It is concerned with responses to the actions of the agent.


General Equilibrium Competitive Equilibrium Supply Function Market Environment Sequential Equilibrium 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Arrow, K.J. 1959. Toward a theory of price adjustment. In M. Abramovitz et al., The Allocation of Economic Resources, Stanford: Stanford University Press, 41–51.Google Scholar
  2. Bresnahan, T.F 1981. Duopoly models with consistent conjectures. American Economic Review 71(5), 934–45.Google Scholar
  3. Drèze, J. 1975. Existence of equilibrium under price rigidity and quantity rationing. International Economic Review 16, 301–20.CrossRefGoogle Scholar
  4. Gabszewicz, J.J. and Vial, J.D. 1972. Oligopoly ‘à la Cournot’ in general equilibrium analysis. Journal of Economy Theory 4, 381–400.CrossRefGoogle Scholar
  5. Gale, D. 1978. A note on conjectural equilibria. Review of Economic Studies 45(1), 33–8.CrossRefGoogle Scholar
  6. Hahn, F.H. 1977. Exercise in conjectural equilibria. Scandinavian Journal of Economics 79, 210–26.CrossRefGoogle Scholar
  7. Hahn, F.H. 1978. On non-Walrasian equilibria. Review of Economic Studies 45, 1–17.CrossRefGoogle Scholar
  8. Hart, O. 1982. Reasonable conjectures. Suntory Toyota Centre for Economics and Related Disciplines. London School of Economics.Google Scholar
  9. Kreps, D.M. and Wilson, R.B. 1982. Sequential equilibria. Econometrica 50, 863–94.CrossRefGoogle Scholar
  10. Makowski, L. 1980. A characterization of perfectly competitive economies with production. Journal of Economic Theory 22(2), 208–21.CrossRefGoogle Scholar
  11. Makowski, L. 1983. ‘Rational conjectures’ aren’t rational and ‘reasonable conjectures’ aren’t reasonable. SSRC Project on Risk, Information and Quantity Signals. Cambridge University Discussion Paper 60.Google Scholar
  12. Negishi, T. 1960. Monopolistic competition and general equilibrium. Review of Economic Studies 28, 196–202.CrossRefGoogle Scholar
  13. Negishi, T. 1979. Micro-Economic Foundations of Keynesian Macro-Economics. Amsterdam: North-Holland.Google Scholar
  14. Novshek, W. and Sonnenschein, H. 1978. Cournot and Walras equilibrium. Journal of Economic Theory 19, 223–66.CrossRefGoogle Scholar
  15. Ostroy, J. 1980. The no-surplus condition as a characterisation of perfectly competitive equilibrium. Journal of Economic Theory 22(2), 183–207.CrossRefGoogle Scholar
  16. Silvestre, J. 1977. A model of a general equilibrium with monopolistic behaviour. Journal of Economic Theory 16(2), 425–42.CrossRefGoogle Scholar
  17. Triffin, R. 1940. Monopolistic Competition and General Equilibrium Theory. Cambridge: Mass.: Harvard University Press.Google Scholar
  18. Ulph, D. 1983. Rational conjectures in the theory of oligopoly. International Journal of Industrial Organization 1(2), 131–54.CrossRefGoogle Scholar

Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1989

Authors and Affiliations

  • F. H. Hahn

There are no affiliations available

Personalised recommendations