On the Existence of Bayesian Cournot Equilibrium Articles uri icon

publication date

  • January 2010

start page

  • 77

end page

  • 94

issue

  • 1

volume

  • 68

International Standard Serial Number (ISSN)

  • 0899-8256

Electronic International Standard Serial Number (EISSN)

  • 1090-2473

abstract

  • We show that when firms have incomplete information about the market demand and their costs, a (Bayesian) Cournot equilibrium in pure strategies may not exist, or be unique. In fact, we are able to construct surprisingly simple and robust examples of duopolies with these features. However, we also find some sufficient conditions for existence, and for uniqueness, of Cournot equilibrium in a certain class of industries. More general results arise when negative prices are possible.