Journal of Economic Dynamics & Control 29 (2005) 277–295 www.elsevier.com/locate/econbase Cournot competition, organization and learning Jason Barr a ; 1 , Francesco Saraceno b; * a Department of Economics, Rutgers University, Newark, NJ 07102, USA b Observatoire Franc ais des Conjonctures  Economiques, 69 Quai d’Orsay, Paris 75007, France Abstract We model rms’ output decisions in a repeated duopoly framework, focusing on three interre- lated issues: (1) the role of learning in the adjustment process toward equilibrium, (2) the role of organizational structure in the rm’s decision making, and (3) the role of changing environmen- tal conditions on learning and output decisions. We characterize the rm as a type of articial neural network, which must estimate its optimal output decision based on signals it receives from the economic environment (which inuences the demand function). Via simulation analysis we show: (1) how organizations learn to estimate the optimal output over time as a function of the environmental dynamics, (2) which networks are optimal for each level of environmental complexity, and (3) the equilibrium industry structure. ? 2004 Elsevier B.V. All rights reserved. JEL classication: C63; D83; L13; L25 Keywords: Cournot competition; Neural networks; Firm learning 1. Introduction The goal of this paper is to investigate the eects of both environmental and or- ganizational factors on the outcome of repeated Cournot games. We model the rm as an information processing network that is capable of learning a data set of en- vironmental variables. Standard models of the rm, in general, tend to focus on the quantity strategy, while ignoring the fact that decisions are made within an organiza- tional framework. This is particularly true for oligopolistic industries, which tend to ∗ Corresponding author. E-mail addresses: jmbarr@andromeda.rutgers.edu (J. Barr), francesco.saraceno@sciences-po.fr (F. Saraceno). 1 Part of this work was done while Jason Barr was a Visiting Assistant Professor in the Department of Economics, Dartmouth College. 0165-1889/$ - see front matter ? 2004 Elsevier B.V. All rights reserved. doi:10.1016/j.jedc.2003.07.003