Stackelberg-Cournot and Cournot Equilibria in a Mixed Markets Exchange Economy ()
ABSTRACT
In this note, we compare two strategic general equilibrium concepts: the Stackelberg-Cournot equilibrium and the Cournot equilibrium. We thus consider a market exchange economy including atoms and a continuum of traders, who behave strategically. We show that, when the preferences of the small traders are represented by Cobb-Douglas utility functions and the atoms have the same utility functions and endowments, the Stackelberg-Cournot and the Cournot equilibrium equilibria coincide if and only if the followers’ best responses functions have a zero slope at the SCE.
Share and Cite:
Julien, L. (2012) Stackelberg-Cournot and Cournot Equilibria in a Mixed Markets Exchange Economy.
Theoretical Economics Letters,
2, 300-306. doi:
10.4236/tel.2012.23056.