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STABILITY AND INSTABILITY OF THE COUCRNOT EQUILIBRIUM *
Author(s) -
CHUMAN EIICHI
Publication year - 2008
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.1467-8454.2008.00346.x
Subject(s) - cournot competition , instability , mathematical economics , stability (learning theory) , mathematics , symmetric equilibrium , equilibrium solution , economics , physics , equilibrium selection , game theory , computer science , repeated game , machine learning , mechanics
Conditions for the Cournot equilibrium to be locally asymptotically stable or unstable are explored, which are still compatible with the second‐order condition for the optimum. The Cournot equilibrium may not be stable even if the condition owing to Fisher (1961), Hahn (1962), and Okuguchi (1964, 1976, 1999) is satisfied, which was given as a sufficient condition for the Cournot equilibrium to be stable. However, as long as a game by symmetric players is concerned, the Cournot equilibrium is unstable whenever F‐H‐O condition is not satisfied. In this sense, that F‐H‐O condition is not satisfied is sufficient for the Cournot equilibrium to be unstable.