Existence of pure strategy equilibrium in Bertrand-Edgeworth games with imperfect divisibility of money

Massimo De Francesco ()

Economics Bulletin, 2008, vol. 12, issue 29, 1-8

Abstract: This paper incorporates imperfect divisibility of money in a price game where a given number of identical firms produce a homogeneous product at constant unit cost up to capacity. We find necessary and sufficient conditions for the existence of a pure strategy equilibrium. Unlike in the continuous action space case, with discrete pricing there may be a range of symmetric pure strategy equilibria - which we fully characterize - a range which may or may not include the competitive price. Also, we determine the maximum number of such equilibria when competitive pricing is itself an equilibrium.

Keywords: Bertrand-Edgeworth; competition (search for similar items in EconPapers)
JEL-codes: C7 L1 (search for similar items in EconPapers)
Date: 2008-11-04
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Working Paper: Existence of pure strategy equilibria in Bertrand-Edgeworth games with imperfect divisibility of money (2008)
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