Aggregation with Cournot competition: an empirical investigation

Koebel, Bertrand and Laisney, François (2016): Aggregation with Cournot competition: an empirical investigation.

Abstract

This paper empirically investigates the existence of Cournot equilibrium and the validity of the Le Chatelier-Samuelson (LCS) principle in the aggregate. Whereas two well known existence conditions are statistically rejected, we cannot reject a third, original, condition. We also find some empirical evidence for the LCS principle, as well as both increasing and constant returns to scale for two-digit US manufacturing industries. The results highlight the importance of imperfect competition for understanding aggregate growth, investment and employment.

• Item Type: MPRA Paper
• Language: English
• Keywords: Aggregation, Le Chatelier-Samuelson principle, returns to scale, market power, markup, own-price elasticity.
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection

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