The Cournot Model And Its Application In The Real Estate Market In China

The Cournot model is a oligopoly competition model,it is a classical model of non-cooperative game in economics.French economist Cournot established the double oligopoly model,taking the natural mineral water as an example.His model is the first treatment of oligopoly.Two firms produce homogeneous products and maximize their profit by deciding the output levels respectively.Cournot discovered that there is a unique equilibrium in this model when the inverse demand function and cost function are both linear,this equilibrium is called Cournot equilibrium by us.Cournot proposed the concept of equilibrium first in 1838.The concept of Nash equilibrium is the extension of Coumot equilibrium.There are many references about Cournot model and Cournot model has developed from double oligopoly linear model to general static game of complete information.Coumot model has widespread application,it may be used in studying real estate,electric power,communication,transportation and so on.First,this paper discusses three assumptions of the model in detail after introducing background of Coumot model.Under these assumptions,it discusses Cournot equilibrium and its existence and uniqueness.Second,it mainly discusses Cournot linear model.This model can be obtained unique pure strategy Nash equilibrium of double Cournot linear model by using reaction functions or method of iterated elimination of strictly dominated strategies,but these two methods are not equivalence.If two oligopoly firms colluded with,every firm would obtain more excess profits.But their collusion is unstable,it is similar in prisoner's dilemma,so this Cournot equivalence is not(weakly) Pareto efficient.Third,if inverse demand function and cost function are both nonlinear in Cournot model,Cournot-Nash equilibriums exist but their uniqueness is uncertain,because of it can't decide the concavity of inverse demand function.Fourth,it introduces the concept and meaning of conjectural variation and explained them by games between railway and road.It also introduces the stability of Coumot revisited process.Persons can analyze the collusion between oligopolies by conjectural variation.Coumot revisited process is a process of iterated elimination of strictly dominated strategies in Cournot model,researching stability of this process is helpful to analyze Cournot equilibrium further.Finally,it analyzes features of monopoly of the Chinese real estate in recent years by using some conclusions of n-person Cournot linear model.Particularly,parameters p₀ and k have important significances in Cournot linear model.For getting the excess profit,Business of real estate can take some measures to control the value of p₀ and k. Particularly it proposed a conclusion that equilibrium price has nothing to do with k but output and profit are decreasing functions of k.Through analyzing to data about Chinese real estate,it finds that conditions of Chinese real estate are consistent with this conclusion in certain period.