Cournot-Nash Equilibrium and Perfect Competition in the Solow-Uzawa Growth Model
Journal Title: Revista CEA - Year 2021, Vol 7, Issue 15
Abstract
The purpose of this study is to contribute to economic growth theory by introducing Cournot competition into the Solow-Uzawa neoclassical growth model with Zhang’s concept of disposable income and utility function. The Solow-Uzawa two-sector growth model deals with economic growth with two sectors with all the markets perfectly competitive. The final goods sector in this study is the same as that in the Solow model with perfect competition. The consumer goods sector is composed of two firms and characterized by Cournot competition. All the input factors are traded in perfectly competitive markets. The duopoly’s product is solely consumed by consumers. Perfectly competitive firms earn zero profit, while duopolists earn positive profits. This study assumes that the population shares the profits equally. First, we built the dynamic model. Afterward, we found a computational procedure to describe the time-dependent path of the economy and conducted comparative dynamic analyses of some parameters. Finally, we compared the economic performances of the model with Cournot competition and the perfectly competitive model.
Authors and Affiliations
Wei-Bin Zhang
Keywords
Related Articles
- EP ID EP697570
- DOI https://doi.org/10.22430/24223182.1801
- Views 107
- Downloads 0
Entrepreneurship - the Need for Interdisciplinary Research
The area of research related to entrepreneurship is not homogeneous. Therefore, the interdisciplinary approach is the one that may successfully expand the domains of activities linked to making decisions about establishi...
Factors that influence economic value in the Colombian apparel industry
This work aims at identifying the factors that influenced economic value in the Colombian apparel industry from 2010 to 2016. Financial and economic value-added indicators are analyzed to measure the growth, efficiency,...
Video tutorial as electronic word-of-mouth and centennials’ purchase intention
In the dynamic digital marketing world, electronic word-of-mouth (eWOM) as a form of communication has caught the attention of marketing specialists, who use it to leverage their brands and reach a very important segment...
Analysis of Financial Assets in Colombia: Hedging Positions with Bitcoin
Purpose: This study aims to infer which financial assets in Colombia can be hedged with Bitcoin positions and determine their correlation with that cryptocurrency. In addition, it seeks to improve our understanding of cr...
The balanced scorecard as a tool for companies in crisis
This article aims to analyze the relevance of the Balanced Scorecard (BSC) for companies that face periods of crisis by means of a literature review that enables to understand the opportunitie...