Rebates in a Bertrand game

Nora Szech and Philipp Weinschenk

Journal of Mathematical Economics, 2013, vol. 49, issue 2, 124-133

Abstract: We study a price competition game in which customers are heterogeneous in the rebates they get from either of two firms. We characterize the transition between competitive pricing (without rebates), mixed strategy equilibrium (for intermediate rebates), and monopoly pricing (for larger rebates).

Keywords: Rebates; Price competition; Bertrand paradox; Golden ratio; Market segmentation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:49:y:2013:i:2:p:124-133

DOI: 10.1016/j.jmateco.2012.12.004

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