Cournot Competition and Endogenous Firm Size

Jason Barr (1) , Francesco Saraceno (2)

1 Department of Economics
2 OFCE - Observatoire français des conjonctures économiques (Sciences Po)

We study the dynamics of firm size in a repeated Cournot game with unkown demand function.We model the firm as a type of artificial neural network. Each period it must learn to map environmental signals to both demand parameters and its rival's output choice. But this learning game is in the background, as we focus on the endogenous adjustment of network size. We investigate the long-run behavior of firm/network size as a function of profits, rival's size, and the type of adjustment rules used.

Mots clés: Firm size; adjustment dynamics; artificial neural networks; Cournot games

Domaines: Economies et finances

Jason Barr, Francesco Saraceno. Cournot Competition and Endogenous Firm Size. 2005. ⟨hal-01052859⟩