www.coalitiontheory.net
Published on www.coalitiontheory.net (http://www.coalitiontheory.net)

Home > Cournot Competition on a Network of Markets and Firms

Cournot Competition on a Network of Markets and Firms

Working paper
Author/s: 
Rahmi IlkiliƧ
Issue number: 
2009.032
Publisher: 
FEEM
Year: 
2009
PDF [1]
Suppose markets and firms are connected in a bi-partite network, where firms can only supply to the markets they are connected to. Firms compete a la Cournot and decide how much to supply to each market they have a link with. We assume that markets have linear demand functions and firms have convex quadratic cost functions. We show there exists a unique equilibrium in any given network of firms and markets. We provide a formula which expresses the quantities at an equilibrium as a function of a network centrality measure.
Tags: 
Industrial Organisation [2]

Source URL:http://www.coalitiontheory.net/content/cournot-competition-network-markets-and-firms

Links
[1] http://www.feem.it/userfiles/attach/Publication/NDL2009/NDL2009-032.pdf [2] http://www.coalitiontheory.net/research-areas/industrial-organisation