Econometrica Vol. 81 No. 6 2013

Revealed Preference Tests of the Cournot Model

Andrés Carvajal¹; Rahul Deb²; James Fenske^3,4; John K.-H. Quah^5,3,6,7,4

¹ Western University · ² University of Toronto · ³ University of Oxford · ⁴ Manor Hospital · ⁵ National University of Singapore · ⁶ Zero to Three · ⁷ Princess Margaret Hospital

Abstract

The aim of this paper is to develop revealed preference tests for Cournot equilibrium. The tests are akin to the widely used revealed preference tests for consumption, but have to take into account the presence of strategic interaction in a game-theoretic setting. The tests take the form of linear programs, the solutions to which also allow us to recover cost information on the firms. To check that these nonparametric tests are sufficiently discriminating to reject real data, we apply them to the market for crude oil.

DOI

10.3982/ecta10175

Volume

81

Issue

6

Pages

2351-2379

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓