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Differentiable comparative statics with payoff functions not differentiable everywhere

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URI: http://hdl.handle.net/10016/3810
ISSN: 0165-1765
DOI: 10.1016/S0165-1765(01)00442-6
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CORCHON_EL_2001_72_3_CL_ps.pdf (246 KB)
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2001
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Elsevier
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In this note we consider Cournot oligopoly. Due to the consideration of several consumers and/ or technologies, the profit function is not differentiable everywhere. We show that Cournot equilibrium never occurs in outputs where profit functions are not-differentiable. This result validates the procedure of differentiating profit functions to perform comparative statics in models where profit functions are not differentiable everywhere.
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Comparative statics, Differentiability
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Economics Letters. 2001, vol. 72, nº 3, p. 397-401
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