Cournot Competition on a Network of Markets and Firms

Suppose markets and firms are connected in a bi-partite network, where firms can only supply to the markets they are connected to. Firms compete a la Cournot and decide how much to supply to each market they have a link with. We assume that markets have linear demand functions and firms have convex quadratic cost functions. We show there exists a unique equilibrium in any given network of firms and markets. We provide a formula which expresses the quantities at an equilibrium as a function of a network centrality measure.


Issue Date:
2009
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/50679
Total Pages:
23
JEL Codes:
C62; C72; D85; L11
Series Statement:
SD
32.2009




 Record created 2017-04-01, last modified 2017-08-25

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