Cournot Models: Dynamics, Uncertainty and Learning
Smith, Vernon L.
This chapter gives an overview of the recent developments in the theory of dynamic oligopolies including some new results. We will discuss the Cournot classical model and its extensions to product differentiation, multiproduct models, price adjusting oligopolies, labor managed and rent seeking games. The dynamic process based on these models will be analyzed. From the theoretical point of view we will investigate models with and without full information, with partial cooperation among the firms, and under the assumption that the information about the production levels of the rivals has time delay. We will also introduce and discuss special learning procedures based on repeated price information. We will also briefly discuss investigations based on laboratory experiments, in which more realistic cases can be examined.