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Equilibrium Uniqueness in a Cournot Model with Demand Uncertainty
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Johan N.M. Lagerlöf
Published/Copyright:
December 4, 2006
If Cournot oligopolists face uncertainty about the intercept of a linear demand function and if the realized market price must be non-negative, then expected demand becomes convex, which can create a multiplicity of equilibria. This note shows that if the distribution of the demand intercept has a monotone hazard rate and if another, rather weak, assumption is satisfied, then uniqueness of equilibrium is guaranteed.
Published Online: 2006-12-4
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
Cournot model;
non-negativity constraint;
demand uncertainty;
unique equilibrium
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- Evolutionary Dynamics and Long-Run Selection
- Party Competition under Private and Public Financing: A Comparison of Institutions
- Limited Observation in Mutual Consent Networks
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