Essays on Cournot
10 October 2008 at 5:29 pm Peter G. Klein 1 comment
| Peter Klein |
Martin Shubik reviews Jean-Philippe Touffut’s edited volume Augustin Cournot: Modelling Economics (Elgar, 2007) for EH.Net. Contributors deal with Cournot’s contributions to economics, probability theory, and statistics, with mixed results (according to Shubik, who thinks Cournot’s contributions to game theory deserved more ink). Shubik thinks Cournot was “not only was a mathematician and probabilist, he was an excellent modeler linking the economic world with basic abstract models . . . [particularly the] modeling and application of a mutually consistent expectations model to oligopoly and economic competition.”
Shubik opens the review with this interesting (if a touch immodest) anecdote:
In the early 1950s, when I was a graduate student at Princeton, I had two academic heroes. They were Cournot and Edgeworth (in my lesser Pantheon were Jevons and Walras). As soon as John Nash discussed his thesis on noncooperative games with me, I pointed out to him that his solution which was mathematically highly general was in essence the one that Cournot had applied to economics and had presented in his great book of 1838. The solution called for individual mutually consistent expectations. At that time game theory in either cooperative or noncooperative form was virtually ignored in economics. It seemed to me that this natural extension of Cournot, whose work was unknown to Nash, was going to extend the scope of oligopolistic studies considerably. Nash and I were joined by John Mayberry in writing an article accepted by _Econometrica_ (“A Comparison of Treatments of a Duopoly Situation,” 1953, 141-54.) This, I believe was the first treatment of oligopoly expanding on Cournot’s work utilizing modern game theory. The mathematical tools were being forged to expand vastly the noncooperative equilibrium methods to economics so brilliantly started by Cournot.
In his introduction to Menger’s Principles Hayek expresses surprise that Menger, unlike Jevons and Walras, seemed unfamiliar with Cournot.
Entry filed under: - Klein -, Methods/Methodology/Theory of Science, People.
Organizations and Markets 
1.
Neel | 11 October 2008 at 11:21 am
In 1911, Sigmund Feilbogen, a Privatdozent at the University of Vienna wrote a series of papers in French in the Journal des Economistes in order to introduce Austrian Economics to French economists. He asked Carl Menger to say a few words about himself, which he did. Menger’s short reply in the form of a letter was published at the end of the last of the series of papers and in that letter, he said that Cournot was among those who had influenced his thought (together with Adam Smith).