Augustin Cournot: Modelling Economics

Augustin Cournot: Modelling Economics

The Cournot Centre series

Edited by Jean-Philippe Touffut

From his earliest publications, Cournot broke from tradition with his predecessors in applying mathematical modelling to the social sphere. Consequently, he was the first to affirm the mathematization of social phenomena as an essential principle. The fecundity of Cournot’s works stems not only from this departure, but also from a richness that irrigated the social sciences of the twentieth century. In this collection, the contributors – including two Nobel laureates in economics – highlight Cournot’s profound innovativeness and continued relevance in the areas of industrial economics, mathematical economics, market competition, game theory and epistemology of probability and statistics. Each of the seven authors reminds us of the force and modernity of Cournot’s thought as a mathematician, historian of the sciences, philosopher and, not least, as an economist.

Chapter 3: The Functions of Economic Models

Bernard Walliser

Subjects: economics and finance, economic psychology, history of economic thought

Extract

1 Bernard Walliser Introduction In his Recherches sur les principes mathématiques de la théorie des richesses ([1838] 1980), Antoine Augustin Cournot established himself as a forerunner in the construction of mathematicized economic models. He is known primarily for his models of monopoly and duopoly in partial equilibrium, but he extended his aim to models of markets and international trade. His mathematical tools, however, were restricted to differential calculus, which had already proved itself in mechanics, without including his own contributions on probabilities. Consequently, he initiated a movement of modelling which, first revived by the Marginalists and Walras, really started to blossom in the mid-twentieth century. In his Essai sur les fondements de la connaissance et sur les caractères de la critique philosophique (1851), Cournot developed his epistemological ideas about the production of scientific knowledge. Although he investigated the mathematization of the real, he did not speak of models, but of theories for expressing abstract mechanisms on a generic level, and laws for expressing empirical regularities on a more specific level. As far as the economic and social sciences are concerned, he certainly introduced innovations, but he drew his examples exclusively from existing knowledge in the physical and biological sciences. From this perspective, his contribution was less innovative in that he did no more than extend reflections already proposed by his contemporaries. The present chapter does not, therefore, aim to describe the implicit or explicit epistemology of Cournot’s models, an epistemology that cannot be described as any more...

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