Profit loss in Cournot oligopolies

Author(s)
Tsitsiklis, John N; Xu, Yunjian
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Abstract
We compare the aggregate profit achieved at a Cournot equilibrium to the maximum possible, which would be obtained if the suppliers were to collude. We establish a lower bound on the profit of Cournot equilibria in terms of a scalar parameter that captures qualitative properties of the inverse demand function and the number of suppliers (or the maximum of the suppliers’ market shares). The lower bounds are tight when the inverse demand function is affine.
Date issued
2013-05
URI
http://hdl.handle.net/1721.1/110536
Department
Massachusetts Institute of Technology. Laboratory for Information and Decision Systems
Journal
Operations Research Letters
Publisher
Elsevier
Citation
Tsitsiklis, John N. and Xu, Yunjian. “Profit Loss in Cournot Oligopolies.” Operations Research Letters 41, 4 (July 2013): 415–420 © 2013 Elsevier B.V.
Version: Author's final manuscript
ISSN
0167-6377
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