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ABSTRACT:
Suppose markets and firms are connected in a bi-partite network, where firms can only supply to the markets they are connected to. Firms compete a la Cournot and decide how much to supply to each market they have a link with. We assume that markets have linear demand functions and firms have convex quadratic cost functions. We show there exists a unique equilibrium in any given network of firms and markets. We provide a formula which expresses the quantities at an equilibrium as a function of a network centrality measure.

SUGGESTED CITATION:
Rahmi Ilkilic, "Cournot Competition on a Network of Markets and Firms" (June 22, 2009). Fondazione Eni Enrico Mattei Working Papers. Working Paper 293.
http://www.bepress.com/feem/paper293