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A continuous approach to oligopolistic market equilibrium. (English) Zbl 0723.90009
Summary: We provide an algorithm for computing Cournot-Nash equilibria in a market that involves finitely many producers. The algorithm amounts to following a certain dynamical system all the way to its steady state, which happens to be a noncooperative equilibrium. The dynamics arise quite naturally as follows. Let each producer continuously adjust the planned production, if desired, as a response to the current aggregate supply. In doing so, the producer is completely guided by myopic profit considerations. We show, under broad hypothesis, that this adjustment process is globally, asymptotically convergent to a Nash equilibrium.

MSC:
91B50 General equilibrium theory
90-08 Computational methods for problems pertaining to operations research and mathematical programming
91B62 Economic growth models
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