This is a preview. Log in through your library. Abstract By presenting a geometric analysis of a duopoly, this article attempts to provide some insights into recent results obtained by Singh and Vives regarding Bertrand and Cournot equilibria and the relative dominance of price and quantity strategies. It shows that under fairly general and reasonable assumptions (a) Cournot equilibrium prices (quantities) are higher than Bertrand equilibrium prices (quantities) and (b) a quantity (price) strategy dominates a price (quantity) strategy if the goods are substitutes (complements). Journal Information The purpose of the RAND Journal of Economics, formerly the Bell Journal of Economics, is to support and encourage research in the behavior of regulated industries, the economic analysis of organizations, and more generally, applied microeconomics. Both theoretical and empirical manuscripts in economics and law are encouraged. Website: www.rje.org Publisher Information Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This item is part of a JSTOR Collection. This is a preview. Log in through your library. Abstract This study compares a differentiated Cournot duopoly with a two-product monopoly by using the socially optimal solution as a reference point. Each solution is allowed to be either an interior or a corner solution. We establish that the ranking regarding each individual price is clear-cut and normal. In contrast, every one of the rankings regarding individual outputs and industry output can go either way. More importantly, the duopoly may be less welfare-efficient than the monopoly. For example, when demands are linear, lower welfare is achieved if the asymmetry between firms is strong enough. One reason is that when firms are asymmetric, the output structure in the duopoly is distorted with probability one, whereas the output structure in the monopoly is generally socially optimal. Journal Information The Hitotsubashi Journal of Economics was first published by Hitotsubashi University in October 1960. Now, it is published bi-annually and is open to all researchers in the field of economics. In particular, The Hitotsubashi Journal of Economics has acquired a reputation for excellence in economic studies that concern empirical, theoretical, and/or historical aspects of the Japanese and Asian economies. Currently, its editorial board is jointly operated by the Graduate School of Economics and the Institute of Economic Research and offers a reasonably quick and fair assessment of manuscripts in most economic fields. Publisher Information Hitotsubashi University is a national university corporation, specializing comprehensively in the social sciences and humanities. Since its foundation, Hitotsubashi has been at the forefront of Japan’s innovation. It has been a powerhouse for generations of Japan’s globally active business leaders as well as a research hub producing cutting-edge research in the global academic network of the social sciences. Established: 1875, Faculty:About 670 faculty members, Students: About 6,400 Hitotsubashi University is made up of 12 principal academic units – four faculties, seven graduate schools and one institute. - Commerce and Management (Faculty, Graduate School) - Economics (Faculty, Graduate School) - Law (Faculty, Graduate School) - Social Sciences (Faculty, Graduate School) - Language and Society (Graduate School) - International Corporate Strategy (Graduate School) - International and Public Policy (School) - Institute of Economic Research Rights & Usage This item is part of a JSTOR Collection. Why is the Cournot equilibrium stable ie why don t firms have any incentive to change their output levels once in equilibrium?)?A Cournot equilibrium is stable because each firm is producing the amount that maximizes its profit, given what its competitors are producing. If all firms behave this way, no firm has an incentive to change its output.
Which one of the following is not true for Cournot duopoly model?Which of the following is not true for the Cournot model? It is applicable to either homogenous or differentiated product case.
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Comparing the cournot equilibrium to a monopolists profit-maximizing choices,
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