Antoine Augustin Cournot
Encyclopedia
Antoine Augustin Cournot (28 August 1801 – 31 March 1877) was a French
philosopher and mathematician
.
Antoine Augustin Cournot was born at Gray, Haute-Saone
. In 1821 he entered one of the most prestigious Grande École, the École Normale Supérieure
, and in 1829 he had earned a doctoral degree in mathematics, with mechanics as his main thesis supplemented by astronomy. After graduating, Cournot held many positions as professor of analysis and mechanics, chief examiner for undergraduate students, and rector of Dijon Academy.
Cournot was mainly a mathematician, but did have some influence over economics. His theories on monopolies
and duopolies
are still famous. In 1838 the book Researches on the Mathematical Principles of the Theory of Wealth was published, in which he used the application of the formulas and symbols of mathematics in economic analysis. This book was highly criticized and not very successful during Cournot’s lifetime, and he did try to rewrite it twice, but it still has influence in economics today. Today many economists believe this book to be the point of departure for modern economic analysis. Cournot introduced the ideas of function
s and probability
into economic analysis. He derived the first formula for the rule of supply and demand
as a function of price
and in fact was the first to draw supply and demand curves on a graph, anticipating the work of Alfred Marshall
by roughly thirty years.
Cournot believed that economists must utilize the tools of mathematics only to establish probable limits and to express less stable facts in more absolute terms. He further held that the practical uses of mathematics in economics do not necessarily involve strict numerical precision.
Cournot is credited with the "one monopoly profit" theorem, which says that a monopolist can extract only one premium for being a monopolist, and getting into complementary markets does not pay. That is, the total profits a monopolist could earn if it sought to leverage its monopoly in one market by monopolizing an adjacent market are equal to the extra profits it could earn anyway by charging more for the monopoly product itself. An exception occurs when the monopolist's market is price-regulated (Baxter's Law
).
Today, Cournot’s work is recognized in econometrics
. He was also a teacher of political economy
and mathematics to Auguste Walras
, who was the father of Leon Walras
. Cournot and Auguste Walras persuaded Leon Walras to try political economics. Cournot is also credited to be one of the sources of inspiration for Leon Walras and his equilibrium theory.
By the time Cournot died in 1877, he was nearly blind.
In the field of economics
he is best known for his work in the field of oligopoly
theory—Cournot competition
which is named after him.
For an interesting early 20th century evaluation see
French people
The French are a nation that share a common French culture and speak the French language as a mother tongue. Historically, the French population are descended from peoples of Celtic, Latin and Germanic origin, and are today a mixture of several ethnic groups...
philosopher and mathematician
Mathematician
A mathematician is a person whose primary area of study is the field of mathematics. Mathematicians are concerned with quantity, structure, space, and change....
.
Antoine Augustin Cournot was born at Gray, Haute-Saone
Haute-Saône
Haute-Saône is a French department of the Franche-Comté région, named after the Saône River.- History :The department was created in the early years of the French Revolution through the application of a law dated 22 December 1789, from part of the former province of Franche-Comté...
. In 1821 he entered one of the most prestigious Grande École, the École Normale Supérieure
École Normale Supérieure
The École normale supérieure is one of the most prestigious French grandes écoles...
, and in 1829 he had earned a doctoral degree in mathematics, with mechanics as his main thesis supplemented by astronomy. After graduating, Cournot held many positions as professor of analysis and mechanics, chief examiner for undergraduate students, and rector of Dijon Academy.
Cournot was mainly a mathematician, but did have some influence over economics. His theories on monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
and duopolies
Duopoly
A true duopoly is a specific type of oligopoly where only two producers exist in one market. In reality, this definition is generally used where only two firms have dominant control over a market...
are still famous. In 1838 the book Researches on the Mathematical Principles of the Theory of Wealth was published, in which he used the application of the formulas and symbols of mathematics in economic analysis. This book was highly criticized and not very successful during Cournot’s lifetime, and he did try to rewrite it twice, but it still has influence in economics today. Today many economists believe this book to be the point of departure for modern economic analysis. Cournot introduced the ideas of function
Function (mathematics)
In mathematics, a function associates one quantity, the argument of the function, also known as the input, with another quantity, the value of the function, also known as the output. A function assigns exactly one output to each input. The argument and the value may be real numbers, but they can...
s and probability
Probability
Probability is ordinarily used to describe an attitude of mind towards some proposition of whose truth we arenot certain. The proposition of interest is usually of the form "Will a specific event occur?" The attitude of mind is of the form "How certain are we that the event will occur?" The...
into economic analysis. He derived the first formula for the rule of supply and demand
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
as a function of price
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
and in fact was the first to draw supply and demand curves on a graph, anticipating the work of Alfred Marshall
Alfred Marshall
Alfred Marshall was an Englishman and one of the most influential economists of his time. His book, Principles of Economics , was the dominant economic textbook in England for many years...
by roughly thirty years.
Cournot believed that economists must utilize the tools of mathematics only to establish probable limits and to express less stable facts in more absolute terms. He further held that the practical uses of mathematics in economics do not necessarily involve strict numerical precision.
Cournot is credited with the "one monopoly profit" theorem, which says that a monopolist can extract only one premium for being a monopolist, and getting into complementary markets does not pay. That is, the total profits a monopolist could earn if it sought to leverage its monopoly in one market by monopolizing an adjacent market are equal to the extra profits it could earn anyway by charging more for the monopoly product itself. An exception occurs when the monopolist's market is price-regulated (Baxter's Law
Baxter's Law
-Origin:Baxter's law is a law of economics that describes how a monopoly in a regulated industry can extend into, and dominate, a non-regulated industry. It is named after law professor William Francis Baxter Jr., who was an antitrust law professor at Stanford University...
).
Today, Cournot’s work is recognized in econometrics
Econometrics
Econometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...
. He was also a teacher of political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
and mathematics to Auguste Walras
Auguste Walras
Auguste Walras was a French school administrator and economist. He was the father of Léon Walras, who was deeply influenced by his father's view on economics....
, who was the father of Leon Walras
Léon Walras
Marie-Esprit-Léon Walras was a French mathematical economist associated with the creation of the general equilibrium theory.-Life and career:...
. Cournot and Auguste Walras persuaded Leon Walras to try political economics. Cournot is also credited to be one of the sources of inspiration for Leon Walras and his equilibrium theory.
By the time Cournot died in 1877, he was nearly blind.
In the field of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
he is best known for his work in the field of oligopoly
Oligopoly
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers . The word is derived, by analogy with "monopoly", from the Greek ὀλίγοι "few" + πόλειν "to sell". Because there are few sellers, each oligopolist is likely to be aware of the actions of the others...
theory—Cournot competition
Cournot competition
Cournot competition is an economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide on independently of each other and at the same time. It is named after Antoine Augustin Cournot who was inspired by observing...
which is named after him.
External links
For an interesting early 20th century evaluation see