Antoine Augustin Cournot
|Died||31 March 1877 75) (aged|
|Alma mater||Sorbonne University|
|Known for|| Cournot competition |
|Fields|| Economics |
|Institutions||University of Grenoble|
|Influenced|| Gabriel Tarde |
Antoine Augustin Cournot (28 August 1801 –31 March 1877) was a French philosopher and mathematician who also contributed to the development of economics.
Antoine Augustin Cournot was born at Gray, Haute-Saône. In 1821 he entered one of the most prestigious Grande École, the École Normale Supérieure, and, according to Sandmo:
in 1823 he took a license degree in mathematics at Sorbonne University. He then became the private secretary of a field marshal who required assistance in writing his memoirs. This position does leave Cournot with considerable time for his own pursuits, for in the course of his ten years in the field marshal's employment he took two doctoral degrees, one in mechanics and one in astronomy. In addition, he published a number of articles and even acquired a degree in law.
Subsequently, Cournot held positions as professor of mathematics, chief examiner for undergraduate students, and rector of Dijon Academy.
By the time Cournot died in 1877, he was nearly blind.
Cournot was mainly a mathematician, but did have some influence over economics. His theories on monopolies and duopolies are still famous.[ citation needed ] In 1838 the book Researches on the Mathematical Principles of the Theory of Wealth was published, in which he used the application of the formulas and symbols of mathematics in economic analysis. This book was highly criticized and not very successful during Cournot's lifetime. He did attempt to rewrite it twice. However, it still has influence in economics today. Today many economists believe this book to be the point of departure for modern economic analysis. Cournot introduced the ideas of functions and probability into economic analysis. He derived the first formula for the rule of supply and demand as a function of price and in fact was the first to draw supply and demand curves on a graph, anticipating the work of Alfred Marshall by roughly thirty years. The Cournot duopoly model developed in his book also introduced the concept of a (pure strategy) Nash equilibrium, the Reaction function and best-response dynamics.
Cournot believed that economists must utilize the tools of mathematics only to establish probable limits and to express less stable facts in more absolute terms. He further held that the practical uses of mathematics in economics do not necessarily involve strict numerical precision.
Today, Cournot's work is recognized in econometrics. He was also a teacher of political economy and mathematics to Auguste Walras, who was the father of Léon Walras. Cournot and Auguste Walras persuaded Léon Walras to try political economics. Cournot is also credited to be one of the sources of inspiration for Léon Walras and his equilibrium theory.[ citation needed ]
In the field of economics he is best known for his work in the field of oligopoly theory—Cournot competition which is named after him.
Cournot worked on determinism (in physics) and chance.
Unlike Pierre-Simon de Laplace, who thought that nothing happen by chance, and Aristotle, who thought that randomness and causality had nothing to do which each other, Cournot combine them both and define randomness as
encounter of two independent causal series
This definition allows randomness even in perfectly deterministic events, and is used to generate random number by the combination of unrelated signal (for instance, temperature and sound).
Game theory is the study of mathematical models of strategic interaction among rational decision-makers. It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed zero-sum games, in which each participant's gains or losses are exactly balanced by those of the other participants. Today, game theory applies to a wide range of behavioral relations, and is now an umbrella term for the science of logical decision making in humans, animals, and computers.
In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium. General equilibrium theory contrasts to the theory of partial equilibrium, which only analyzes single markets.
Marie-Esprit-Léon Walras was a French mathematical economist and Georgist. He formulated the marginal theory of value and pioneered the development of general equilibrium theory.
In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case is a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes, and quantity is called the "competitive quantity" or market clearing quantity. But,the concept of equilibrium in economics also applies to imperfectly competitive markets, where it takes the form of a Nash equilibrium.
Gérard Debreu was a French-born economist and mathematician. Best known as a professor of economics at the University of California, Berkeley, where he began work in 1962, he won the 1983 Nobel Memorial Prize in Economic Sciences.
Joseph Louis François Bertrand was a French mathematician who worked in the fields of number theory, differential geometry, probability theory, economics and thermodynamics.
Bertrand competition is a model of competition used in economics, named after Joseph Louis François Bertrand (1822–1900). It describes interactions among firms (sellers) that set prices and their customers (buyers) that choose quantities at the prices set. The model was formulated in 1883 by Bertrand in a review of Antoine Augustin Cournot's book Recherches sur les Principes Mathématiques de la Théorie des Richesses (1838) in which Cournot had put forward the Cournot model. Cournot argued that when firms choose quantities, the equilibrium outcome involves firms pricing above marginal cost and hence the competitive price. In his review, Bertrand argued that if firms chose prices rather than quantities, then the competitive outcome would occur with price equal to marginal cost. The model was not formalized by Bertrand: however, the idea was developed into a mathematical model by Francis Ysidro Edgeworth in 1889.
Cournot competition is an economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same time. It is named after Antoine Augustin Cournot (1801–1877) who was inspired by observing competition in a spring water duopoly. It has the following features:
Michio Morishima was a heterodox economist and public intellectual who was the Sir John Hicks Professor of Economics at the London School of Economics from 1970–88. He was also professor at Osaka University and member of the British Academy. In 1976 he won the Order of Culture.
A Walrasian auction, introduced by Léon Walras, is a type of simultaneous auction where each agent calculates its demand for the good at every possible price and submits this to an auctioneer. The price is then set so that the total demand across all agents equals the total amount of the good. Thus, a Walrasian auction perfectly matches the supply and the demand.
A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established. Markets facilitate trade and enable the distribution and resource allocation in a society. Markets allow any trade-able item to be evaluated and priced. A market emerges more or less spontaneously or may be constructed deliberately by human interaction in order to enable the exchange of rights of services and goods. Markets generally supplant gift economies and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale.
The Lausanne School of economics, sometimes referred to as the Mathematical School, refers to the neoclassical economics school of thought surrounding Léon Walras and Vilfredo Pareto. It is named after the University of Lausanne, at which both Walras and Pareto held professorships. Polish economist Leon Winiarski is also said to have been a member of the Lausanne School.
Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 by Harvard University Press. It is based on Samuelson's 1941 doctoral dissertation at Harvard University. The book sought to demonstrate a common mathematical structure underlying multiple branches of economics from two basic principles: maximizing behavior of agents and stability of equilibrium as to economic systems. Among other contributions, it advanced the theory of index numbers and generalized welfare economics. It is especially known for definitively stating and formalizing qualitative and quantitative versions of the "comparative statics" method for calculating how a change in any parameter affects an economic system. One of its key insights about comparative statics, called the correspondence principle, states that stability of equilibrium implies testable predictions about how the equilibrium changes when parameters are changed.
Value and Capital is a book by the British economist John Richard Hicks, published in 1939. It is considered a classic exposition of microeconomic theory. Central results include:
Auguste Walras was a French school administrator and (amateur) economist. He was the father of Léon Walras, who was deeply influenced by his father's view on economics.
Mathematical economics is the application of mathematical methods to represent theories and analyze problems in economics. By convention, these applied methods are beyond simple geometry, such as differential and integral calculus, difference and differential equations, matrix algebra, mathematical programming, and other computational methods. Proponents of this approach claim that it allows the formulation of theoretical relationships with rigor, generality, and simplicity.
Griffith Conrad Evans was a mathematician working for much of his career at the University of California, Berkeley. He is largely credited with elevating Berkeley's mathematics department to a top-tier research department, having recruited many notable mathematicians in the 1930s and 1940s.
The progressive theory of capital is an economic theory posited by Léon Walras in 1874 in part 5 of his book Elements of Pure Economics.
Xavier Vives is a Spanish economist regarded as one of the main figures in the field of industrial organization and, more broadly, microeconomics. He is currently Chaired Professor of Regulation, Competition and Public Policies, and academic director of the Public-Private Sector Research Center at IESE Business School in Barcelona.
Charles Frederick Roos was an American economist who made contributions to mathematical economics. He was one of the founders of the Econometric Society together with American economist Irving Fisher and Norwegian economist Ragnar Frisch in 1930. He served as Secretary-Treasurer during the first year of the Society and was elected as President in 1948. He was director of research of the Cowles Commission from September 1934 to January 1937.
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Antoine Augustin Cournot