Part II - Background

Summary

Overview

Three papers comprise this section. First, Chapter Seven of Cournot's book, “Of the Competition of Producers”, is reproduced. In this chapter Cournot provides the first model of independent multiagent choice, initially analyzing two duopolists under constant marginal cost production; this is later extended to n firms and nonconstant marginal cost. As Fisher [1898] points out (and as is still true today), much of the main body of Cournot's book contains contributions to economic theory (see also the discussion in the Introduction) that few economists credit Cournot for. Cournot was the first to introduce aggregate demand and supply curves, and to provide the notion of diminishing returns (see Fisher [1898]). His original work on monopoly provides the basic model still in use today (Hicks [1935]).

Nathanial T. Bacon, brother-in-law of Irving Fisher's wife, translated Cournot's 1838 work into English in 1897. Fisher [1898] initially believed that Cournot had been grossly careless in the preparation of his manuscript, but it later transpired that Cournot was partially blind during this period (Nichol [1938], Fisher [1938]). Further reflections on Cournot's contributions and life may be found in the papers of Fisher and Nichol.

Cournot was a mathematician and, given the level of mathematics of most 19th-century economists, it is probably not surprising that at some point his work would be reviewed by another mathematician, in this case Joseph Bertrand, a name identified in mathematics with areas such as probability theory and differential geometry.