Cournot, Antoine-Augustin

born Aug. 28, 1801, Gray, France

died March 31, 1877, Paris

French economist and mathematician.

The first economist to apply mathematics effectively to the treatment of economic questions, he made important contributions with his discussion of supply and demand functions, the shifting of taxes, and problems of international trade, and he is best remembered for his discussion of strategic behaviour in a market with only two producers, a so-called duopoly. His principal work is Researches into the Mathematical Principles of the Theory of Wealth (1838).

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▪ French economist and mathematician

born August 28, 1801, Gray, France

died March 31, 1877, Paris

      French economist and mathematician. Cournot was the first economist who, with competent knowledge of both subjects, endeavoured to apply mathematics to the treatment of economics. His main work in economics is Recherches sur les principes mathématiques de la théorie des richesses (1838; Researches into the Mathematical Principles of the Theory of Wealth). His primary concern was the analysis of partial market equilibrium, which he based on the assumption that participants in the process of exchange are either producers or merchants whose goal is the maximization of profit. He therefore ignored the concept of utility (utility and value). His most important contributions were his discussions of supply-and-demand (supply and demand) functions and of the establishment of equilibrium under conditions of monopoly (monopoly and competition), duopoly, and perfect competition; his analysis of the shifting of taxes, which he treated as changes in the cost of production; and his discussion of problems of international trade.

      Cournot was the first economist to define and draw a demand curve to illustrate the relationship between price of and demand for a given item. He proceeded to show that the profit-maximizing output for a producer is reached when the marginal cost (marginal-cost pricing) (the cost of producing one additional unit) equals the marginal revenue (the revenue realized from selling one additional unit). This work was lost until its rediscovery by Joan Robinson (Robinson, Joan) almost a century later. Moreover, Cournot introduced the idea of elasticity of demand, though he did not use that phrase.

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