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 6: Cournot and the Social Income

Robert M. Solow

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

Extract

Robert M. Solow Like any English-speaking economist, all I ever knew of Cournot is the 1897 English translation of The Mathematical Principles of the Theory of Wealth. More accurately, Cournot was always identified with his theory of duopoly, or more generally of markets with a small number of sellers, along with the alternative theories proposed later by Bertrand and von Stackelberg. There is a large literature on Cournot and the theory of oligopoly, and an enormous literature on the more general notion that came to be called the Cournot–Nash equilibrium in the theory of n-person non-cooperative games. This has never been a special interest of mine, so it would be foolish for me to pursue that central theme in a conference devoted to Cournot and his work. So I looked further. I had not actually reread the Mathematical Principles since my graduatestudent days 60 years ago. When I picked it up again, I was struck – even in translation – by the force and clarity of Cournot’s mind, and the natural modernity of the way he approached mathematical economics. Irving Fisher made the same observation in his 1898 review of the Bacon translation. I also noticed the existence of two chapters that were new to me, or that I had forgotten: Chapter 11, ‘Of the Social Income’, and Chapter 12, ‘Of Variations in the Social Income, Resulting from the Communication of Markets’ (by which Cournot means international or interregional trade). These chapters seem not to have been much discussed. They appear...

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