Stackelberg-Cournot and Cournot Equilibria in a Mixed Markets Exchange Economy

Stackelberg versus Cournot Equilibrium

We reconsider Stackelberg’s classical critique of the Cournot duopoly, in the framework of endogenous timing for two-player games. For quantity duopoly we provide different sets of minimal conditions, directly on the demand and cost functions, yielding respectively the simultaneous and the two sequential modes of play. While our findings essentially confirm the predominance of the former, they ...

Endogenous Timing in Pollution Control: Stackelberg versus Cournot-Nash Equilibria

Stackelberg Beats Cournot: on Collusion and Efficiency in Experimental Markets*

We report on an experiment designed to compare Stackelberg and Cournot duopoly markets with quantity competition. We implement both a random matching and a fixed-pairs version for each market. Stackelberg markets yield, regardless of the matching scheme, higher outputs than Cournot markets and, thus, higher efficiency. For Cournot markets, we replicate a pattern known from previous experiments....

Cournot equilibria in two-settlement electricity markets with system contingencies

We study Nash equilibrium in two-settlement competitive electricity markets with horizontal market power, flow congestion, demand uncertainties and probabilistic system contingencies. The equilibrium is formulated as a stochastic Equilibrium Problem with Equilibrium Constraints (EPEC) in which each firm solves a stochastic Mathematical Program with Equilibrium Constraints (MPEC). We assume a no...

Two Remarks on Cournot Equilibria

Making the weak assumption that the left-hand side of this equation is downward sloping, there will be a unique Y that solves this equation, which depends only on the sum of the marginal costs, not on their distribution across the firms. The observation that output and price in a Cournot industry is independent of the distribution of marginal costs has undoubtably been noted and used several ti...