Abstract. Firms operating in a market economy naturally strive to increase revenues. When large firms affect prices by their actions, this task involves nontrivial mathematics, i.e., game-theoretic oligopoly models. The survey is more concerned with Cournot competition than with Bertrand competition. The existence, uniqueness, and stability of Cournot equilibrium are discussed. The other issues under consideration are as follows: the entry of new firms into the market; the barriers that can be imposed for this; and the impact of such an entry on society’s welfare as well as on total surplus and consumer surplus. The problems of collusion between firms are touched upon. Publications comparing the prices of goods, the profits of firms, and society’s welfare under Cournot and Bertrand competition are overviewed. Much attention is paid to the problems faced by firms due to the ignorance of some current or future market conditions and the existing uncertainty. The issues of information sharing among firms are considered. One approach to reducing marginal cost is the purchase of licenses; licensing in a Cournot duopoly is also described. Computational methods for Cournot equilibria in the case of multi-product firms are presented. Finally, publications with particular applications of Cournot equilibria are considered.
Keywords: Cournot equilibrium, social efficiency, Bertrand equilibrium, information sharing, uncertainty, licensing, cartel formation, complementarity problem.
Funding. This work was supported by Academician Nikolai Fedorenko International Scientific Foundation for Economic Research, project no. 2022-139.
Cournot Oligopoly: Strategy Choice under Uncertainty and Other Problems