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STABILITY OF THE COURNOT SOLUTION AND FREE ENTRY: A NOTE *
Author(s) -
IKEDA TAKESHI
Publication year - 2006
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.2006.00293.x
Subject(s) - cournot competition , oligopoly , free entry , stability (learning theory) , economics , microeconomics , mathematical economics , computer science , machine learning
Taking a traditional approach, I show that by using the discrete adjustment system, the Cournot solution in a free entry oligopoly with increasing returns to scale is stable only when the number of firms is very small. We must pay attention to stability when using the free entry Cournot oligopoly model.