Talk:Cournot competition
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What is N? The first mention of the variable doesn't define it.
I second this. Can somebody please define N? I believe it supposed to be the number of firms in the market, but I can't confirm as I am a lowly undergraduate.
Yes, N is the number of firms in an industry.
- The text explanation of the diagrams needs to be made a bit clearer. I have made some minor edits but don't have the expertise to rewrite them
[edit] Homogeneous?
It seems to me that the goods should be non-homogeneous (but still competing, obviously) since the strategy for one firm is to monopolize its share of the market. With homogeneous goods, buyers would flock to the cheaper version. I like to think of it in terms of Macintoshes vs. PCs-- they're non-homogeneous, but both sides are monopolizing their market share. If I'm wrong, why should homogeneous products be central to Cournot competition?--134.173.58.54 04:16, 10 December 2006 (UTC)
What you're referring to would be a variant of Bertrand competition. In Cournot competition firms don't set price, the market does. The firms just deliver the goods to the market. Hence, it's competition in quantity, not price, which is the distinguishing feature of Cournot model. As a result there's always only a single price and it makes sense for goods to be homogenous. There are some Bertrand-Cournot hybrid models where the firms still compete in quantities but goods are differentiatied - however, these are roughly equivalent to the simple Cournot model with a homogenous good but different cost structures (let me stress the "roughly" in that sentence).radek 19:21, 10 December 2006 (UTC)
