Dickson, Alex and Hartley, Roger (2007) On a foundation for Cournot equilibrium. In: European Economic Association and the Econometric Society European Meetings (EEA-ESEM) 2006, 2006-08-24 - 2006-08-28, Vienna, Austria.
We show in the context of a bilateral oligopoly where all agents are allowed to behave strategically the unexpected result that when the number of buyers becomes large the outcomes in a strategic market game do not converge to those at the Cournot equilibrium. However, convergence to Cournot outcomes is restored if the game is sequential: sellers move simultaneously as do buyers, but the former always move before the latter. This suggests that the ability to commit to supply decisions is an essential feature of Cournot equilibrium.
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