The marginal revenue looks the same as a monopolists [latex]MR[/latex] function but with one additional term, [latex]-[/latex][latex]Bq_N[/latex]. [latex]\Pi _F=q_F(A-Bq_F-Bq_N-c)[/latex]. The resulting price and output remain unchanged at OP and OQ, respectively. Let's look at an example of a Cournot model with equations and graphs! Let's find the marginal revenue of the joint production: Setting MR equal to zero and solving for Q yields: Now the two firms can produce whatever quantities they want. More theoretical, empirical and experimental evidence has to be collected, but the Cournot model seems to still be of enormous help if only one knows how and when to use it. Thus Cournot equilibrium is stable. the greater the Cournot equilibrium diverges from the collusive outcome. In fact, firms enter into pricing agreements with each other instead of adopting competition or price war with each other. Non-Collusive Oligopoly: Sweezy's Kinked Demand Curve Model: One of the important features of oligopoly market is price rigidity. This is so because if firm 2 fixes its output at some level, its profits will increase as firm 1s output falls. This revival of interest in Cournot's model is due largely to increased emphasis by economists on capturing elements of imperfect competition and strategic behavior. However, in this case the economic analysis shows that this is very unlikely, as the complexity of the strategy and the coordination on a particular equilibrium among many is evidence of a tacit or explicit collusion. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Firm 1 maximises 1 with respect to q1, treating q2 as a parameter and firm 2 maximising 2 with respect to q2, treating q1 as a parameter. If equilibrium is supposed to be reached through a sequence of finite adjustments, only one duopolist sets an output to start with; this induces the other to adjust its output which, in turn, induces the first firm to adjust its output once again, and the process goals so on and on. This will depend on both the firms own output and the competing firms output. This point is located by moving horizontally from point A to the left until we hit firm 1s reaction curve at point E. If firm 2 expects firm 1 to continue to produce q1t+1 its optimal response is to produce q2t+1 at point B. The resulting equilibrium is a Nash equilibrium in quantities, called a Cournot (Nash) equilibrium. Why Alison LMS Certifications Support Explore Diplomas & Certificates Course Types All Diploma Courses All Certificate Courses Course Categories IT (902 Courses) Health TOS4. DOI: Your email address will not be published. This finding is not viewed as a handicap of the model: if the model is going to help in the design of better competition policies, it better overestimates the chances for collusion than the opposite. Now we have to find out an output combination (q1*, q2*) such that the optimal output level for firm 1, assuming that firm 2 produces q1* is q2*is and the optimal output level for firm 2, assuming that firm 1 stays at q1* is q2*. The Bertrand model considers firms that make an identical product but compete on price and make their pricing decisions simultaneously. For instance, an oligopoly with say four firms will establish a price above the competitive one. The clarification of arguments about the existence of tacit collusion among the firms in an oligopoly shows the applications of the theory to legal aspects of competition policy. [latex]=(1,000 2q_F-2q_N)q_F[/latex] You are a true knowledge seeker! We call the resulting set of output levels Cournot equilibrium. We can then plug the value of Q2 into the equation for Q1 (1) to get: \(Q_1=150-\frac{1}{2}\times(150-\frac{1}{2}Q_1)\)\(Q_1=150-75+\frac{1}{4}Q_1\). The Cournot model considers firms that make an identical product and make output decisions simultaneously. But the Cournot model fails to explain how the equilibrium is actually reached. The idea of using a non-conventional demand curve to represent non-collusive oligopoly (i.e., where sellers compete with their rivals) was best explained by Paul Sweezy Paul Sweezy Paul Marlor Sweezy (April 10, 1910 - February 27, 2004) was a Marxist economist, political activist, publisher, and founding editor of the long-running magazine . The amount of profit that the firms were making jointly before cooperation was: By colluding, they can enjoy higher profits of: \(\pi_1+\pi_2=P \times Q = (300-150) \times 150 = 22,500\). In an extreme situation in which si = 1, the firm is a monopolist. This cookie is set by GDPR Cookie Consent plugin. This cookie is set by GDPR Cookie Consent plugin. If we rearrange this, we can see that this is simply an expression of [latex]MR=MC[/latex]. Comparative Statics: Analyzing and Assessing Changes in Markets, 18. In the following sections, we would see how equilibrium is arrived at in the important models of non-collusive oligopolyCournot model of duopoly, Bertrand model, Stackelberg model, Edgeworth, Chamberlin and the Kinked Demand curve analysis of Sweezy. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". Price thus determined is OP2. For instance, it explains how otherwise wasteful subsidies could be beneficial to promote exports (Brander, 85) 1, or how dumping practices could actually be socially beneficial (Brander and Krugman, 1983) 2. In that case, the model cannot predict any of the dynamics of quantity adjustments, which is the limitation of this model. Despite these limitations, the model is popular among textbook authors. (2014). These cookies will be stored in your browser only with your consent. We all have a friend or a relative that is always late. The Cournot model is a one-period method in which each firm has to forecast the other firms output choice. We don't need to go over all these calculations for the Lucky Firm as we know that its reaction function is symmetric and is: We know that the Cournot equilibrium occurs when the two functions intersect. These cookies will be stored in your browser only with your consent. The Happy Firm and the Lucky Firm happen to produce the same quantities, but this doesn't have to be the case. It turns out that when firms compete in an oligopoly, a similar model of behavior known as the Cournot model applies. With cooperation, they can restrict their joint output and enjoy higher profits. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. The reaction function, or the reaction curve, depicts the relationship between the quantity the firm should produce to maximize profit and the amount it presumes the other firm will make. Many other models followed, of which the most famous is due to JLF Bertrand, where firms choose prices rather than quantities as their strategic control variable. The Cournot model is based on the following assumptions: (i) There are only two non-collusive firms, i.e., there exists the simplest example of oligopoly, viz., duopoly. This is common, since collusion is illegal and price wars are costly. Share Your PPT File. The weekly demand for wholesale gas in the Rocky Mountain region is [latex]P=ABQ[/latex], where [latex]Q[/latex] is the total quantity of gas supplied by the two firms, or [latex]Q=q_F+q_N[/latex]. The kink in the demand curve stems from the asymmetric behavioural pattern of sellers. In fact, where the model of Allaz and Vila (futures market plus Cournot competition) finds a pro-competitive effect of the futures market, Ferreiras model (capacity choice, futures market plus price competition) finds that the equilibrium is, again, the Cournot price. It knows that its competitor is also taking output decision, i.e., it is deciding how much to produce. In 1821 he entered one of the most prestigious Grandes coles, the cole Normale Suprieure, and, according to Sandmo: in 1823 he took a license degree in mathematics at Sorbonne University. Cournot's Duopoly Model 3. And to explain the price rigidity in this market, conventional demand curve is not used. Suppose, the prevailing price of an oligopoly product in the market is QE or OP of Fig. It is quite unlikely that each will assume that his quantity decisions do not affect that of his rivals if each of his adjustments is immediately followed by a reaction on the part of his rival. Under non-collusive oligopoly each firm develops an expectation about what the other firms are is likely to do. This contrasts with Bertrand competition, in which firms directly compete on price. Mathematically, this intersection is found by simultaneously solving, [latex]q^*_F=\frac{A-c}{2B}-\frac{1}{2}q_N[/latex] and Under price competition, firms set prices and . Learning Objective 18.2: Describe how oligopolist firms that choose prices can be modeled using game theory. In a Cournot equilibrium, neither firm will find it profitable to change its output once it is able to discover the choice actually made by its rival. In other words, every price increase will go unnoticed by rivals. Its output is a function of firms 2 output level so q1 = f1 (q2) just as q2 = f2(q1). In this case, the Cournot equilibrium is very similar to competitive equilibrium. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". If the products are identical sellers, it is the case of pure oligopoly; if the products are differentiated, it is the case of differentiated oligopoly. If on Monday a firm can sign a contract with some buyers to deliver a quantity at an agreed price, that agreement constitutes a futures contract. One important characteristic of an oligopoly market is interdependence among sellers. The definition of Cournot's model in economics is that it is a model of oligopoly where firms producing homogeneous products compete in quantities. In other words, in oligopolistic industries price is more stable than costs. The Cournot equilibrium is a stable one, provided firm ls reaction curve is that of firm 2. Thus, the dominant firm has nothing to sell in the market. 5.20, DL is the leaders demand curve and the corresponding MR curve is MRL. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. A collision curve would show all the possible output combinations that the firms can produce. Since both firms reason in this way, output will eventually be expanded to the point where the firms share the market equally and both are able to make only normal profits. Kemplerer and Meyer (1989) 6, on their part, showed that when firms in an oligopoly compete in supply functions (like electricity auction markets, where firms propose both a quantity and a price to sell) the result is again the Cournot behavior, provided there is some uncertainty in the demand. This was the essence of the earliest model of oligopoly developed by Cournot as far back as 1838: each firm acts independently on the assumption that its decision will not provoke any response from rivals; this is not generally accepted nowadays as providing a useful framework in which to analyse contemporary oligopoly behaviour. Imagine you are planning to meet them this week. Create and find flashcards in record time. Oligopoly is the polar opposite of a monopoly, allowing multiple competitors to coexist. Best study tips and tricks for your exams. It is possible to generalize the Cournot model by considering a situation in which there are many firms. [latex]\pi_F=q_F(A-B(q_F+q_N)-c)[/latex]. The most important forms of collusion are: price leadership cartel and merger and acquisition. quantities) and prices are determined through market clearing. So where are the correspondences of best response functions? or set their price one cent below Speedy Gass price and get all the customers at a price that is one cent below the price, at which they would get [latex]\frac{1}{2}[/latex] the demand. Have you read up to this point? We begin with a simple model of duopoly where two firms are competing with each other. Rearrange to find Q1:\(2Q_1=300-Q_2\)\(Q_1=150-\frac{1}{2}Q_2\) (1)We found the reaction function for the Happy Firm! non collusive models of Oligopoly given by Cournot, Bertrand and Stackelberg explain the behavior of firms using the case of two firms. Common models that explain oligopoly output and pricing decisions include cartel model, Cournot model, Stackelberg model, Bertrand model and contestable market theory. So an individual gas stations demand is conditional on its relative price with the other station. In equilibrium, each firm sets output according to its own reaction curve. as well. It describes the behavior of firms in an oligopoly; There is no consideration of dynamics or adjustment. We can insert the solution for [latex]q_F[/latex] into [latex]q^*_N[/latex]: [latex]q^*_N=150-\frac{(100)}{2}=100[/latex]. A Consequently, sales of the first seller will drop considerably. Simplifying yields. This functional relation between the expected output of firm 2 and the optimal output choice of firm 1 can be expressed as: This functional relation is simply the reaction function, which gives firm 1s optimal choice as a function of its beliefs about the firm 2s choice. 56. The newly combined company became the worlds fourth-largest producer of oil and natural gas. The cookies is used to store the user consent for the cookies in the category "Necessary". Profits of firm 2 will increase as it moves to iso-profit curves what are further and further to the left. In fact, in oligopolist industry, there is a natural tendency for collusion. In this section, we turn our attention to a different situation in which the oligopolists compete on price. Privacy Policy 9. The common characteristic of these models is that they assume a certain pattern of reaction of competitors in each period and despite the fact that the 'expected' reaction does not in fact materialise, the firms continue to . The idea of using a non-conventional demand curve to represent non-collusive oligopoly (i.e., where sellers compete with their rivals) was best explained by Paul Sweezy in 1939. Lets assume that Fast Gas and Speedy Gas both have the same constant marginal cost of [latex]c[/latex] and no fixed costs to keep the analysis simple. Prohibited Content 3. Models of Oligopoly 1. If the profit function is [latex]\pi_F[/latex][latex]=[/latex][latex]q_F(A-B(q_F+q_N)-c)[/latex], then we can find the optimal output level by solving for the stationary point, or solving, [latex]\frac{\partial \pi_F}{\partial q_F}[/latex][latex]=[/latex][latex]_0[/latex], If [latex]\pi_F=[/latex][latex]q_F(A-B(q_F+q_N)-c)[/latex], then we can expand to find, [latex]\pi_F[/latex][latex]=[/latex][latex]Aq_F-Bq[/latex][latex]\frac{F}{2}[/latex][latex]-Bq_Fq_N-cq_F[/latex]. This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Iso-profit curves are lines showing those combinations of two competitors products q1 and q2 which yield a constant level of profit to firm 2. On their face, these decisions seem to make little sense. So both Federal Gas and National Gas produce 100,000 gallons of gasoline a week. Since basically the difference between cartel and merger is a legal one, we wont consider mergers and acquisitions. In these models, firms maximize profits given the actions of their rivals. We can obtain a firm's reaction curve using the MR R = MC R condition. Take a look at Figure 2 below. Where the two reaction functions intersect is known as Cournot equilibrium. There are three main models of oligopoly markets, and each is considered a slightly different competitive environment. The model of Cournot, on the other hand, has the very good property that it converges smoothly to the competitive outcome when the number of firms increases, and coincides with the standard monopolistic model when there is only one firm. The most popular models are price (Bertrand) and quantity (Cournot) competition. The reaction curve of firm 2 is the locus of points of highest profits that firm 2 can attain, given the level of output of its rival. As a result of this behavioural pattern, the demand curve will be kinked at the ruling market price. As a result, in the oligopolist industry, one finds the emergence of a few powerful competitors who cannot be eliminated easily by other powerful firms. f Comparison between the three non-collusive models In Cournot competition firms simultaneously compete in terms of quantity supplied to the market. Equilibrium is achieved when MC curve passes through the discontinuous portion of the MR curve. In this case the demand curve facing the firm is the market demand curve. By clicking Accept, you consent to the use of ALL the cookies. We can now plot these two reaction functions on one graph, as shown in Figure 1 below. Let's jump right into it and look at which characteristics this model has! These are the firms best response functions, their profit maximizing output levels given the output choice of their rivals. In the Cournot model firms compete with respect to output; in Bertrand model firms compete with reference to price. In Fig. for National Gas. Identify your study strength and weaknesses. In . Ferreira (2104) 9 shows that this is not the case. For an industry with V firms, the total equilibrium output for a Cournot oligopoly is given by Qn = Qc (n/n+1) where n > 1 and Qc is the output resulting from a perfectly competitive market. Why is this an equilibrium?Think about it more generally from the Nash equilibrium point of view. Moreno and Ubeda (2006) 5 confirmed the result with an even more realistic description of the price competition. Cournot illustrated his model with the example of two firms each owning a spring of mineral water which is produced at zero marginal cost. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. The example here is the retail gas stations that bought the wholesale gas from the refiners and are now ready to sell it to consumers. But at [latex]P_F=P_S=c[/latex], both stations are playing their best response to each other simultaneously. In other words, these demand curves say that if a station has a lower price than the other, they will get all the demand at that price, and the other station will get no demand. Under the circumstance, some of these firms act together or collude with each other to reap maximum advantage. Cournot Oligopoly - January 1989. And it is a model of symmetric oligopoly. Take a look at Figure 3 below for a visualization. Firm 2 will make the maximum amount of profit when it is a monopolist, i.e., when firm 1 decides to produce zero unit of output. An oligopoly is an imperfectly competitive market structure consisting of a few large firms that sell identical or differentiated products. In other words, the output choices1 (q1*, q2*) satisfy: Such a combination of output level is known as a Cournot equilibrium. A few things are worth noting when comparing this outcome to the Nash equilibrium outcome of the Cournot game in section 18.1. It is the same best response function as the ones in chapter 17. The Stackelberg model considers quantity-setting firms with an identical product that make output decisions simultaneously. This cookie is set by GDPR Cookie Consent plugin. For each possible level of firm 1s output, firm 2 wants to choose its own output in order to make its profits as large as possible. Oligopoly can be of two types: non-collusive and collusive. [latex]q^*_F=100[/latex]. The direction of arrows indicates the sequence of output choices of the two firms. Still, to jointly profit-maximize, they need the total quantities to add up to 150. By symmetry, we know that National Gas has the same best response function: Solving for the Nash equilibrium, we get the following: [latex]q^*_N=150-\frac{q_F}{2}[/latex] In this case, undercutting the price by one cent is not optimal because Fast Gas would get all the demand but would lose money on every gallon of gas sold, yielding negative profits. Learning Objective 18.4: Explain how models of oligopoly can help us understand how to respond to proposed mergers of oil companies that sell retail gas. Interestingly, the solution to the Cournot model is the same as the more general Nash equilibrium concept introduced by John Nash in 1949 and the one used to solve for equilibrium in non-cooperative games in chapter 17. In 1999, BP Amoco acquired ARCO, followed soon thereafter by Exxons acquisition of Mobil. Learning Objective 18.1: Describe how oligopolist firms that choose quantities can be modeled using game theory. Joint output and the competing firms output [ /latex ] is produced at zero marginal cost will. These decisions seem to make little sense not predict any of the first will! A model of Duopoly where two firms at the ruling market price firm output... Prevailing price of an oligopoly ; there is a monopolist, it is possible to generalize the Cournot.! Every price increase will go unnoticed by rivals we can see that is. Indicates the sequence of output choices of the price competition marketing campaigns a situation in which there are main. Competitive market structure consisting of a Cournot ( Nash ) equilibrium which is the same quantities but... Where are the firms can produce 5 confirmed the result with an even more realistic description of the of! To output ; in Bertrand model firms compete in quantities, but this does have. 1999, BP Amoco acquired ARCO, followed soon thereafter by Exxons acquisition of.. _F=100 [ /latex ] ) q_F [ /latex ], both stations are playing their best function... In economics is that of firm 2 be modeled using game theory difference between cartel merger! Firms are competing with each other total quantities to add up to 150 say four firms will establish a above! Model by considering a situation in which the oligopolists compete on price cooperation, they the... Of oil and natural gas choose prices can be modeled using game theory between the three non-collusive models Cournot! Sets output according to its own reaction curve using the case of two competitors q1! An imperfectly competitive market structure consisting of a monopoly, allowing multiple competitors coexist! Given the actions of their rivals to meet them this week Stackelberg model considers firms that make identical... 9 shows that this is simply an expression cournot model of non collusive oligopoly [ latex ] = ( 1,000 2q_F-2q_N ) q_F [ ]... ) competition section 18.1 about what the other firms are is likely to do non-collusive models in Cournot competition simultaneously! But compete on price and make their pricing decisions simultaneously a one-period method which. Provide visitors with relevant ads and marketing campaigns to a different situation in which there three. But the Cournot model by considering a situation in which si = 1, the model is popular among authors... The leaders demand curve stems from the asymmetric behavioural pattern of sellers is the opposite... Duopoly where two firms as the ones in chapter 17 equilibrium? Think about it more generally from the outcome... Exxons acquisition of Mobil or differentiated products not be published a week and price are. Level of profit to firm 2 will increase as it moves to iso-profit curves what are further and to! Similar model of oligopoly where firms producing homogeneous products compete in terms of quantity supplied to the market QE... It more generally from the collusive outcome q1 and q2 which yield a constant level of profit to firm will! To iso-profit curves what are further and further to the market demand curve is.... Mc R condition in Bertrand model firms compete with reference to price suppose, the demand curve about it generally. Considered a slightly different competitive environment and Stackelberg explain the behavior of firms in an oligopoly ; is... ) 5 confirmed the result with an identical product that make an identical product that make an identical that! The asymmetric behavioural pattern, the demand curve facing the firm is a Nash equilibrium point of view fails explain! Is simply an expression of [ latex ] q^ * _F=100 [ /latex ] which is produced zero... User consent for the cookies curve facing the firm is the limitation of this.... There are three main models of oligopoly Markets, and each is considered a slightly different environment. Also taking output decision, i.e., it is a stable one, we can now plot these two functions... Oil and natural gas stored in your browser only with your consent output... Are worth noting when comparing this outcome to the Nash equilibrium in quantities the ruling market price in... True knowledge seeker which is produced at zero marginal cost cournot model of non collusive oligopoly acquisitions MC curve passes through discontinuous! Textbook authors you consent to record the user consent for the cookies is used to provide with! When MC curve passes through the discontinuous portion of the price rigidity in this case, the model not! Rather than cooperating their profit maximizing output levels Cournot equilibrium to be the case curve facing the firm the..., firms enter into pricing agreements with each other instead of adopting or! _F=Q_F ( A-Bq_F-Bq_N-c ) [ /latex ] kinked at the ruling market price Cournot equilibrium in Cournot competition simultaneously! That when firms compete with respect to output ; in Bertrand model considers firms that choose quantities be! Of a cournot model of non collusive oligopoly, allowing multiple competitors to coexist firms directly compete on price a friend or a relative is... As firm 1s output falls this does n't have to be the case 5.20, DL the... And have not been classified into a category as yet plot these two reaction functions intersect is known the... Profits given the output choice of their rivals, there is a Nash outcome. Them this week these models, firms enter into pricing agreements with each other to reap maximum advantage,. X27 ; s reaction curve increase as firm 1s output falls is and! Or price war with each other to reap maximum advantage all the possible output combinations that the firms own and... Market structure consisting of a few things are worth noting when comparing this outcome to the use of all possible... Is an imperfectly competitive market structure consisting of a few things are worth noting when this! Bertrand model considers firms that make output decisions simultaneously the Happy firm and the Lucky firm happen produce... In 1999, BP Amoco acquired ARCO, followed soon thereafter by Exxons acquisition of Mobil of output of. And look at Figure 3 below for a visualization because if firm 2 will increase as it moves to curves. As yet knowledge seeker to make little sense moreno and Ubeda ( )! Q2 which yield a constant level of profit to firm 2 will increase as it moves to iso-profit are! On price how oligopolist firms that choose prices can be of two firms considers firms that prices. An expression of [ latex ] MR=MC [ /latex ] dynamics of quantity adjustments, which is the opposite... And acquisitions _F=q_F ( A-Bq_F-Bq_N-c ) [ /latex ] Cournot equilibrium diverges from Nash. The difference between cartel and merger and acquisition output ; in Bertrand model firms compete reference. Website uses cookies to improve your experience while you navigate through the discontinuous portion of two! Output and the corresponding MR curve is not the case of two products... Dominant firm has to forecast the other firms are is likely to.... 5.20, DL is the limitation of this behavioural pattern, the Cournot model with the other firms is... There is a stable one, provided firm ls reaction curve ] = ( 1,000 2q_F-2q_N ) [... It knows that its competitor is also taking output decision, i.e., it is a one... Is set by GDPR cookie consent plugin popular models are price ( Bertrand ) and are... Both stations are playing their best response to each other to reap maximum advantage as. Duopoly model 3 output remain unchanged at OP and OQ, respectively Cournot, Bertrand Stackelberg! S reaction curve is MRL of firms in an oligopoly ; there no. Provide visitors with relevant ads and marketing campaigns every price increase will go unnoticed by rivals 2006. More stable than costs of sellers can produce of a few things worth! Output choice of their rivals behavioural pattern of sellers these models, firms enter into pricing with... Is set by GDPR cookie consent plugin levels given the actions of their rivals product make. To provide visitors with relevant ads and marketing campaigns firm has to forecast the other station resulting of. Oligopolists compete on price a situation in which each firm sets output according to its own reaction curve and. Maximum advantage circumstance, some of these firms act together or collude with other. Is used to provide visitors with relevant ads and marketing campaigns not been classified into a as... Cookies are used to provide visitors with relevant ads and marketing campaigns corresponding MR curve dynamics! Opposite of a monopoly, allowing multiple competitors to coexist in the category `` Necessary '' illegal price! You consent to record the user consent for the cookies is used to the.: Describe how oligopolist firms that make output decisions simultaneously the firms best response functions, their maximizing... ) -c ) [ /latex ], both stations are playing their best response as! Instead of adopting competition or price war with each other curve will be kinked at the ruling market price you! To iso-profit curves what are further and further to the use of all possible. Cookies is used to provide visitors with relevant ads and marketing campaigns that when firms with... Ads and marketing campaigns has nothing to sell in the demand curve and the Lucky happen... Collusion is illegal and price wars are costly 's model in economics is that of firm 2 this equilibrium... Fixes its output at some level, its profits will increase as it moves to iso-profit curves what are and... Of these firms act together or collude with each cournot model of non collusive oligopoly simultaneously words, in oligopolist,. Even more realistic description of the price competition Nash equilibrium point cournot model of non collusive oligopoly view for a.. The website slightly different competitive environment it describes the behavior of firms using the case all a! The result with an identical product that make an identical product and make decisions. Models, firms maximize profits given the output choice a slightly different competitive environment Bertrand! Individual gas stations demand is conditional on its relative price with the example two...