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Aggregation with Cournot competition: the Le Chatelier Samuelson principle

Koebel, Bertrand and François, Laisney (2014): Aggregation with Cournot competition: the Le Chatelier Samuelson principle. Forthcoming in: Annals of Economics and Statistics

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Abstract

This paper studies the aggregate substitution and expansion effects triggered by changes in input prices in a context where firms supply a homogeneous commodity and compete in quantities à la Cournot. We derive a sufficient condition for the existence of a Cournot equilibrium and show that this condition also ensures that the Le Chatelier-Samuelson principle is satisfied in the aggregate at the Cournot equilibrium, although it may not be satisfied at the firm level.

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