Approximate Bertrand Equilibria in a Replicated Industry

Huw Dixon

The Review of Economic Studies, 1987, vol. 54, issue 1, 47-62

Abstract: This paper considers the existence and properties of approximate Bertrand equilibria in a replicated industry. Price setting firms produce a homogeneous product with weakly convex costs. The main results are that: (a) Given ɛ > 0, an ɛ-equilibrium exists if the industry is large enough; (b) If the ɛ is small enough, and the industry large enough, any ɛ-equilibrium is approximately competitive. These results depend on how contingent demand is specified.

Date: 1987
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