Cournot–Bertrand endogenous behavior in a differentiated oligopoly with entry deterrence

Duarte Brito and Margarida Catalão-Lopes

Theory and Decision, 2023, vol. 95, issue 1, No 4, 55-78

Abstract: Abstract This paper presents a new theoretical justification for the Cournot–Bertrand model to arise in equilibrium when firms have, at the outset, the same cost structure and sell symmetrically differentiated products. The Cournot–Bertrand model assumes some firms compete on price, adjusting their production to meet demand, while others set quantities and let their price adjust until market equilibrium is reached. We show that this may occur endogenously due to the possibility of entry, which may be deterred when some of the incumbents decide to set prices, while others free ride on this behavior and choose quantities.

Keywords: Cournot–Bertrand oligopoly; Entry deterrence; Product differentiation (search for similar items in EconPapers)
JEL-codes: L12 L13 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11238-022-09909-5 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
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: https://EconPapers.repec.org/RePEc:kap:theord:v:95:y:2023:i:1:d:10.1007_s11238-022-09909-5

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11238/PS2

DOI: 10.1007/s11238-022-09909-5

Access Statistics for this article

Theory and Decision is currently edited by Mohammed Abdellaoui

More articles in Theory and Decision from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().