The Cournot-Theocharis Problem Reconsidered
Knowledge Area
Economía AplicadaSponsors
The authors 1 and 3 are partially supported by the grant FS 00684/PI/04 from Fundación Séneca (Comunidad Autónoma de la Región de Murcia, Spain)Publication date
2008-08Publisher
ElsevierBibliographic Citation
CÁNOVAS, J.S., PUU, Tönu, RUIZ, Manuel. The Cournot-Theocharis Problem Reconsidered. Chaos, Solitons & Fractals, 37 (4): 1025-1039, Agosto 2008. ISSN 0960-0779Keywords
Demanda linealCompetidores
Punto Cournot
Argumento Theocharis
Dinámica global
Linear demand
Competitors
Cournot point
Marginal costs
Theocharis's argument
Abstract
In 1959 Theocharis [10] showed that with linear demand and constant marginal costs Cournot
equilibrium is destabilized when the competitors become more than three. With three competitors the Cournot equilibrium point becomes neutrally stable, so, even then, any perturbation
throws the system into an endless oscillation. Theocharis's argument was in fact proposed
already in 1939 by Palander [4]. None of these authors considered the global dynamics of the
system, which necessarily becomes nonlinear when consideration is taken of the facts that prices,
supply quantities, and profits of active firms cannot be negative. In the present paper we address
the global dynamics.
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