Cournot Model of Duopoly with Incomplete Information

Cournot (1838) anticipated Nash's definition of equilibrium by overa century, but only in the context of a particular model of duopoly.Not surprisingly, Cournot's work is one of the classics of gametheory; it is also one of the cornerstones of the theory of industrialorganization. We consider a modification of the Cournot's modelwith an uncertainty in the demand. We find the Bayesian Nashequilibrium of the game.