I am not familiar with economics but does anybody know any reference about cournot competition with strategic consumers?

In other words, is there any known competition where both producer and consumer can behave strategically and set the prices?

  • $\begingroup$ What's the strategic aspect that consumers would consider in your case? $\endgroup$
    – BB King
    Mar 28 '19 at 15:02
  • 2
    $\begingroup$ Bargaining? $\endgroup$
    – Herr K.
    Mar 28 '19 at 15:04
  • $\begingroup$ @BB King For example conumers can decide on their demand to change the price $\endgroup$
    – KSH
    Mar 28 '19 at 16:38
  • $\begingroup$ @HerrK. As far as I know bargaining is a cooperative game. I am looking for a noncooperative game. $\endgroup$
    – KSH
    Apr 2 '19 at 9:35

Studying a situation where consumers and producers interact to set price is precisely the study of bargaining. Any game theory text you pick up will almost certainly cover bargaining. The text I learned from, which I enjoyed thoroughly was Osborne's an introduction to Game Theory.

A first example of a bargaining game would be Rubinstein's game of alternating offers

I don't think adding consumer strategic behaviour to Cournot directly would be particularly more enlightening than studying bargaining separately, since Cournot already abstracts from the price setting mechanism.


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