Labor-managed Bertrand and Cournot oligopolies (Q1087458)

The paper displays a set of assumptions under which the Cournot equilibrium prices are not lower than the Bertrand equilibrium prices; this is a model of oligopolies producing one homogeneous merchandise. The dynamics of the model is of the form \(x_ i=g^ i(p_ 1,...,p_ n)\) with n firms, where \(x_ i\) and \(p_ i\) are the output and price of the i-th firm. The Cournot equilibrium is based on a reaction function which assumes that the outputs of the competitors stay fixed. The reaction function which determines the Bertrand equilibrium assumes that prices are not changed by the competitors. The conditions implying the quoted result are quite general and natural. An example is given with Cournot prices strictly higher than Bertrand prices.