Aggregation and Imperfect Competition: On the Existence of Equilibrium

Andrew Caplin () and Barry Nalebuff

No 937, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: We present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products. The central result provides general conditions under which there exists a pure strategy price equilibrium for any number of firms producing any set of products. This includes products with multi-dimensional attributes. In addition to the proof of existence, we provide conditions for uniqueness. Our analysis covers location models, the characteristic approach, and probabilistic choice together in a unified framework. To prove existence, we employ aggregation theorems due to Prekopa (1971) and Borell (1975). Our companion paper [CFDP 938] introduces these theorems and develops the application to super-majority voting rules.

Keywords: Imperfect competition; Bertrand equilibrium; differentiated products; prices; price competition (search for similar items in EconPapers)
Date: 1990-02
View list of references View citations in EconPapers

Downloads: (external link)
http://cowles.econ.yale.edu/P/cd/d09a/d0937.pdf (application/pdf)

Related works:
Working Paper: AGGREGATION AND IMPERFECT COMPETITION: ON THE EXISTENCE OF EQUILIBRIUM (1989)
Journal Article: Aggregation and Imperfect Competition: On the Existence of Equilibrium (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cwl:cwldpp:937

Ordering information: This working paper can be ordered from
Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
The price is None.

Access Statistics for this paper

More papers in Cowles Foundation Discussion Papers from Cowles Foundation, Yale University
Address: Yale University, Box 208281, New Haven, CT 06520-8281 USA
Contact information at EDIRC.
Series data maintained by Glena Ames ().