The aggregate Le Chatelier Samuelson principle with Cournot competition


Koebel, Bertrand ; Laisney, François


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URL: https://ub-madoc.bib.uni-mannheim.de/2880
URN: urn:nbn:de:bsz:180-madoc-28801
Document Type: Working paper
Year of publication: 2010
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: C33 D24 ,
Subject headings (SWD): USA , Dyopol , Skalenertrag , Aggregation , Arbeitsnachfrage , Marktmechanismus
Keywords (English): Aggregation , returns to scale , market power , markup , own-price elasticity
Abstract: This paper studies the aggregate substitution and expansion effects triggered by changes in input prices, in a context where firms supply a homogenous 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 likely to be satisfied in the aggregate at the Cournot equilibrium, although it may not be satisfied at the firm level. These results are confirmed by the empirical findings obtained for two-digit US manufacturing industries, which also highlight the importance of imperfect competition for understanding aggregate growth, investment and employment.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Koebel, Bertrand ; Laisney, François (2010) The aggregate Le Chatelier Samuelson principle with Cournot competition. Open Access [Working paper]
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