The life of Antoine Augustin Cournot was testimony to Andrew Carnegie's assertion, “It does not pay to pioneer.” This genius of economics and philosophy was born into a family of French farmers who had tilled the same land for almost 300 years. His life was marred by tragedy and marked by anonymity. Most of his working life was spent as a school superintendent, and even that job was secured only through the influence of his friend Siméon Denis Poisson, the famous French physicist and statistician. The significance of his work was recognized only long after his death.
Today, Cournot is remembered best in his homeland as a philosopher; in the English-speaking world he is hailed as a brilliant pioneer in economics. Working largely in isolation early in the nineteenth century, Cournot examined the conventional economic wisdom of his day through the microscope of differential calculus. And what a rich lode of insights this examination exposed! Among other pathbreaking contributions, Cournot (a) formally introduced demand and supply curves, (b) differentiated between changes in demand or supply and changes in the quantities demanded or supplied, (c) mathematically derived the marginal revenue equals marginal cost rule for profit maximization, and (d) specified equilibrium conditions for monopolists, interdependent oligopolists, and firms operating under pure competition. In short, his insights provided the basic tools required for much of modern microeconomic theory. Unfortunately, however, these tools remained locked in the toolbox for decades because few economists understood how to use them, and even those who might have were seldom exposed to his work. Only his first and most influential book , which fairly bristles with originality, was translated into English.
analysis of monopolistic profit maximization contains the kernel of his
theory of the firm. As an example, he considered a monopolist who could
costlessly supply water from a mineral spring with uniquely healthful
Cournot demonstrated that this is accomplished when marginal revenue (derived from the demand curve) equals marginal cost (MR = MC). Cournot's procedure is now commonplace, but before 1838 there was no formal theory of profit maximization. Virtually every fundamental axiom in the economic theory of the firm stems from Cournot's trailblazing analysis.
Cournot's demeanor was solitary and melancholy, traits that influenced his writing. His austere books abound with facts and rigorous mathematical proofs. He confessed to a fellow French economist that he was unpopular with his publishers because none of his books sold enough to be profitable until years after their publication. Unfortunately, his most productive years were absorbed by his duties as a school administrator.
Recognition of the profundity of Cournot's work was obstructed by his contemporaries' discomfort with mathematics, a problem made worse because gradual deterioration of his eyesight impaired the accuracy of his mathematical notation. For their part, prejudice and shortsightedness blinded other economists to his advances in theory, which remained largely unappreciated until more than two decades after his death.
Today, however, Cournot's contributions are heralded as precursors for mathematical game theory, which many economists view as the most promising approach now available for describing strategic interaction, whether between firms, poker players, military tacticians, or international diplomats.
Author: Ralph Byrns
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