models appropriate application in the market: Cournot model is applicable in markets where the firm must make production decision in advance and must be committed to selling that quantity level; thus, unlikely to react to fluctuations in rival’s quantity produced. Bertrand model is applicable in markets where capacity is sufficiently flexible and firms are capable to meet any market demand that arises at price level, which they set. Neither model is necessarily "better" than the other. The accuracy of the predictions of each model will vary from industry to industry, depending on the closeness of each model to the industry situation. If capacity and output can be easily changed, Bertrand is generally a better model of duopoly competition. If output and capacity are difficult to adjust, then Cournot is generally a better model. Under some conditions the Cournot model can be recast as a two-stage model, wherein the first stage firms choose capacities, and in the second they compete in Bertrand fashion. See also Aggregative game Conjectural variation Cournot competition Differentiated Bertrand competition Stackelberg competition Nash equilibrium Game theory Bertrand paradox (economics) Bertrand–Edgeworth model Edgeworth paradox Substitute good References Further reading Oligoply Theory made Simple, Chapter 6 of Surfing Economics by Huw Dixon. The Pure Theory of Monopoly, Francis Edgeworth Bertrand's review of Walras and Cournot Economics models Competition (economics) Non-cooperative games Oligopoly 1883 in economics