Open AccessSurplus sharing in Cournot oligopoly
Author(s) -
Condorelli Daniele,
Szentes Balázs
Publication year - 2022
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te4515
Subject(s) - cournot competition , economic surplus , economics , oligopoly , microeconomics , marginal cost , bertrand paradox (economics) , marginal profit , profit (economics) , deadweight loss , bertrand competition , willingness to pay , mathematical economics , welfare , market economy
We characterize equilibria of oligopolistic markets where identical firms with constant marginal cost compete à la Cournot. For given maximal willingness to pay and maximal total demand, we first identify all combinations of equilibrium consumer surplus and industry profit that can arise from arbitrary demand functions. Then, as a further restriction, we fix the average willingness to pay above marginal cost (i.e., first‐best surplus) and identify all possible triples of consumer surplus, industry profit, and deadweight loss.