Bertrand and Price-Taking Equilibria in Markets with Product Differentiation
نویسندگان
چکیده
منابع مشابه
Bertrand ' s price competition in markets with fixed costs
We analyze Bertrand’s price competition in a homogenous good market with a fixed cost and an increasing marginal cost (i.e., with variable returns to scale). If the fixed cost is avoidable, we show that the non-subadditivity of the cost function at the output corresponding to the oligopoly break-even price, denoted by D(pL(n)), is sufficient to guarantee that the market supports an equilibrium ...
متن کاملBertrand-Edgeworth Competition with Substantial Product Differentiation
Since Kreps and Scheinkman's seminal article (1983) a large number of papers have analyzed capacity constraints' potential to relax price competition. However, the ensuing literature has assumed that products are either perfect or very close substitutes. Therefore none of the papers has investigated the interaction between capacity constraints and substantial local monopoly power. The aim of th...
متن کاملRationing Rules and Bertrand-edgeworth Equilibria in Large Markets
Allen and Hellwig (A-H hereafter) (1984a) show for a market where firms compete in prices with capacity constraints that as the number of firms increases, Nash equilibria (in pure or mixed strategies) converge in distribution to a (perfectly) competitive price, but monopoly prices persist for any number of firms. In other words, the supports of the equilibrium mixed strategies do not necessaril...
متن کاملHorizontal Product Differentiation in Bertrand and Cournot Duopoly: the Bertrand Paradox Revisited and Comparative Competitiveness
This paper provides a simple model of endogenous horizontal product differentiation that has two important implications. First, the model can explain the “empirical Bertrand paradox” – the failure to observe homogeneous product Bertrand oligopoly. If product differentiation is possible at reasonable cost, then Bertrand firms would always invest in product differentiation. Using a quadratic util...
متن کاملComparing Cournot and Bertrand Equilibria in a Differentiated Duopoly with Product R&D
This paper compares Bertrand and Cournot equilibria in a differentiated duopoly with substitute goods and product R&D. I find that R&D expenditure, prices and firms’ net profits are always higher under quantity competition than under price competition. Furthermore, output, consumer surplus and total welfare are higher in the Bertrand equilibrium than in the Cournot equilibrium if either R&D spi...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2008
ISSN: 1556-5068
DOI: 10.2139/ssrn.1037821