Stackelberg-Cournot and Cournot Equilibria in a Mixed Markets Exchange Economy

Ludovic A. Julien

LEG, University of Burgundy, Burgundy, France.

DOI: 10.4236/tel.[phone]                

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.

Keywords

Stackelberg-Cournot Equilibrium; Conjectural Variations; Preferences

Conflicts of Interest

The authors declare no conflicts of interest.

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