Definition of Cournot competition:
Cournot competition is an economic model describing an industry structure in which rival companies offering an identical product compete on the amount of output they produce, independently and at the same time. It is named after its founder, French mathematician Augustin Cournot.
Market situation in which each firm and its competitors make their output and pricing decision on the assumption that their competitors are committed to a certain level of production and will readily reduce their prices to achieve that level of sales. Named after the French mathematician and economist Antoine Augustin Cournot (1801-77) who researched its mathematical basis. See also Bertrand competition.
Companies operating in markets with limited competition, called oligopolies, often compete by seeking to steal market share away from each other. One way to do this is to alter the number of goods sold.
How to use Cournot competition in a sentence?
- The model applies when firms produce identical or standardized goods and it is assumed they cannot collude or form a cartel.
- The idea that one firm reacts to what it believes a rival will produce forms part of the perfect competition theory.
- Cournot competition is an economic model in which competing firms choose a quantity to produce independently and simultaneously.
Meaning of Cournot competition & Cournot competition Definition