Use this identifier to quote or link this document:

Bayesian nash equilibrium in ''linear'' cournot models with private information about costs
Hurkens, Sjaak
Universitat Autònoma de Barcelona. Unitat de Fonaments de l'Anàlisi Econòmica; Institut d'Anàlisi Econòmica
Calculating explicit closed form solutions of Cournot models where firms have private information about their costs is, in general, very cumbersome. Most authors consider therefore linear demands and constant marginal costs. However, within this framework, the nonnegativity constraint on prices (and quantities) has been ignored or not properly dealt with and the correct calculation of all Bayesian Nash equilibria is more complicated than expected. Moreover, multiple symmetric and interior Bayesianf equilibria may exist for an open set of parameters. The reason for this is that linear demand is not really linear, since there is a kink at zero price: the general ''linear'' inverse demand function is P (Q) = max{a - bQ, 0} rather than P (Q) = a - bQ.
Cournot, A. A. (Antoine Augustin), 1801-1877 -- Teoria econòmica
Jocs, Teoria de
L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons:
Working Paper
Working papers; 924.12

Full text files in this document

Files Size Format
92412.pdf 179.5 KB PDF

Show full item record