For a detailed description of the math, as well as use of this script, please see the docs
directory.
This python script can calculate the amount of production of N companies, in a Cournot game market. Furthermore it can merge two companies that compete in that market, by adding their marginal costs horizontally, without any efficiency parameters.
At the time of writing this description, the following assumptions must be made:
- The demand is linear and the "demand" parameter given in the script is the inverse demand.
- The companies that compete have a quadratic cost curves. The parameter given to the script is the marginal cost of the company.
In mergers:
- In edge cases where one company's marginal cost is linear, but the other one's are constant, the script exits. Such case would increase the complexity of the script. If I get a single reason I should at this, I will.
Please see the github page for this repository for more information.
Breaking changes might occur once I start working on Isoelastic Demand Curves. Feature updates will be prioritized before documentation updates. Please download a release of this script for the proper documentation.