I 100% agree with you about these models being “industries” and “production functions” rather than underlying firms. Originally I was going to write about that – but I felt that, even at this level there were missing issues in what Keen wrote.

Ultimately, if he is going to discuss Cournot he should stick to Cournot, and if he is going to solve games he needs to make sure that the individual strategies are consistent and that we have a Nash Equilibrium. Fundamentally, I suspect he is missing the issue of observability and timing in his work – which is no good as far as my limited understanding goes.

Ignoring that, I agree with your discussion. In a Nash equilibrium all firms will maximise profits given their beliefs, which are correct in equilibrium, about what the other firms will do. If some firms can observe other firms actions you don’t have a static game, you now have dynamics which makes things more interesting and realistic but also a lot more complicated.