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G-88-24

Nash-Cournot Equilibria in The European Gas Market: A Case Where Open-Loop and Feedback Solutions Coincide

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We consider an oligopolistic industry extracting a non-renewable resource sold in a competitive market. We show, first, that if all players, but one, have infinite private reserves and production capacities (or alternatively the expansion of the production capacities is exogeneous) then Nash open-loop and feedback equilibria conincide. Second, we show that these conditions correspond to a fairly good approximation of the European gas market and hence the practical importance of our result.

, 14 pages

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