Endogenous Timing of Moves in Bertrand-Edgeworth Triopolies

Attila Tasnádi

MPRA Paper from University Library of Munich, Germany

Abstract: We determine the endogenous order of moves in which the firms set their prices in the framework of a capacity-constrained Bertrand-Edgeworth triopoly. A three-period timing game that determines the period in which the firms announce their prices precedes the price-setting stage. We show for the non-trivial case (in which the Bertrand-Edgeworth triopoly has only an equilibrium in non-degenerated mixedstrategies) that the firm with the largest capacity sets its price first, while the two other firms set their prices later. Our result extends a finding by Deneckere and Kovenock (1992) from duopolies to triopolies. This extension was made possible by Hirata's (2009) recent advancements on the mixed-strategy equilibria of Bertrand-Edgeworth games.

Keywords: Bertrand-Edgeworth; price leadership; oligopoly; timing games (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2012-12-27
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Endogenous timing of moves in Bertrand–Edgeworth triopolies (2016)
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