The Cournot competition in the spatial equilibrium model

In this paper, we develop conditions for the Takayama-Judge spatial equilibrium model to collapse into the classical Cournot model. In the case of heterogeneous demand and cost functions, the linear complementarity programming formulation is proposed to model the spatial Cournot model. Lastly, we implement the spatial equilibrium Cournot model to the US coal market and compare its performance to that of the original Takayama-Judge model. To the best of our knowledge, this is the only spatial equilibrium Cournot model estimated and implemented. (C) 2002 Elsevier Science B.V. All rights reserved.