Cournot duopoly

(noun)

An economic model describing an industry in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same time.

Related Terms

Examples of Cournot duopoly in the following topics:

  • Duopoly Example

    • The Cournot model, in which firms compete on output, and the Bertrand model, in which firms compete on price, describe duopoly dynamics.
    • There are two principle duopoly models: Cournot duopoly and Bertrand duopoly.
    • Cournot duopoly is an economic model that describes an industry structure in which firms compete on output levels.
    • The Cournot model focuses on the production output decision of a single firm.
    • The accuracy of the Cournot or Bertrand model will vary from industry to industry.

  • Oligopoly

    • Augustin Cournot (1801-1877), a French mathematician/economist developed the theory of monopoly and then considered the effects of two interdependent competitors (sellers) in a duopoly.
    • Cournot's analysis of two sellers of spring water clearly established that the price and output of one seller was a reaction to the price and output of the other seller.
    • If they compete, Cournot concluded that the output would be
    • Cournot's recognition of the interdependence of sellers provided the foundation for a variety of approaches to explain the interdependent behavior of oligopolists.

  • Competition-Based Pricing

    • Smith and other classical economists before Cournot were referring to price and non-price rivalry among producers to sell their goods on best terms by the bidding of buyers, and not necessarily to a large number of sellers or to a market in final equilibrium.

  • Equilibrium

    • Antoine Augustin Cournot, [1801-1877] adopted the concept of partial equilibrium in 1838 out of mathematical expediency (The New Palgrave).

  • Economic Way of Thinking

    • Augustin Cournot [1801-1877, French], a French mathematician, independently developed the use of marginal analysis in determining the behavior of firms who were competing in a market.