Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30154
Authors: 
Koebel, Bertrand M.
Laisney, François
Year of Publication: 
2010
Series/Report no.: 
ZEW Discussion Papers 10-009
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.
Subjects: 
Aggregation
returns to scale
market power
markup
own-price elasticity
JEL: 
C33
D24
Document Type: 
Working Paper

Files in This Item:
File
Size
486.71 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.