Cournot games with limited demand: from multiple equilibria to stochastic equilibrium (Q2301681)

This paper deals with Cournot games with limited demand resulting in the existence of three different regimes, depending on the level of the demand, including an intermediate regime that shows a range of possible equilibria. It is also shown that the introduction of a delayed stochastic demand reduces the range of equilibria to a single equilibrium in the intermediate regime. In addition, equilibria in other regimes converge to the equilibrium obtained in the non-delayed setting. In this sense, the lagged case can be seen as a smoothing of the no lag case. Numerical illustrations are presented when demand is modeled by an Ornstein-Uhlenbeck process and price is an affine function of output.