We characterize the equilibrium in a homogeneous good Cournot duopoly in which firms have the choice to react to a cost …-push shock by paying a lump-sum adjustment cost in order to offset the initial rise in marginal cost. Our results show that the … size of the shock and the size of the adjustment cost jointly determine the nature and the number of the equilibria …

We characterize the equilibrium in a homogeneous good Cournot duopoly in which firms have the choice to react to a cost …-push shock by paying a lump-sum adjustment cost in order to offset the initial rise in marginal cost. Our results show that the … size of the shock and the size of the adjustment cost jointly determine the nature and the number of the equilibria …

In this paper we verify the functioning of the standard neoclassical adjustment to equilibrium after a demand shock in … a non-cooperative simultaneous Cournot duopoly with complete, symmetric and imperfect information. Our results show that … guaranteed. We show that the size of the demand shock determines the nature and number of equilibria generated by strategic …