<blockquote>
  <p>[...] <br>
   One way to interpret this result is to see our two-stage game as a mechanism to generate Cournot-like outcomes that dispenses with the mythical auctioneer. </p>
</blockquote>

<p>A justification is given in <a href="https://www.jstor.org/stable/3003636?seq=1#metadata_info_tab_contents" rel="nofollow noreferrer">Kreps-Scheinkmann (1983)</a>. They argue that this is the outcome if price competition follows production. For details see the linked article.</p>

CC BY-SA 4.0
2020-05-20T10:30:55.613Z
2020-05-20T10:30:55.613Z
Giskard
<p>In the cornout model two firms choose the amount of a product they wish to produce. It is assumed that the price that results is the market clearing price for the total supply. Is there a justification for this?</p>

<competitive-equilibrium>
why is market clearing price assumed in cournot model with homogenous products
robot112
# why is market clearing price assumed in cournot model with homogenous products

(Asked by: username_0 on 2020-05-20)

In the cornout model two firms choose the amount of a product they wish to produce. It is assumed that the price that results is the market clearing price for the total supply. Is there a justification for this?

**Tags:** competitive-equilibrium


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## 1 answers

### Answer by username_1 on 2020-05-20. Score: 2 | Accepted answer

> [...]   
> One way to interpret this result is to see our two-stage game as a mechanism to generate Cournot-like outcomes that dispenses with the mythical auctioneer.

A justification is given in [Kreps-Scheinkmann (1983)](https://www.jstor.org/stable/3003636?seq=1#metadata_info_tab_contents). They argue that this is the outcome if price competition follows production. For details see the linked article.


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