| Article ID: | iaor20013975 |
| Country: | Netherlands |
| Volume: | 89 |
| Start Page Number: | 165 |
| End Page Number: | 173 |
| Publication Date: | Jun 1999 |
| Journal: | Annals of Operations Research |
| Authors: | Lonard Daniel, Nishimura Kazuo |
A Cournot model with an arbitrary nonlinear demand function and where firms do not observe their rival's actions directly is shown to allow mistaken beliefs to persist. These alter the original equilibrium state and, in a range of beliefs, destroy its stability and create cycles. The dynamics of the Cournot model are therefore fundamentally affected.