Winner-take-all price competition

John Morgan and Michael Baye

Economic Theory, 2002, vol. 19, issue 2, 282 pages

Abstract: We analyze an oligopoly model of homogeneous product price competition that allows for discontinuities in demand and/or costs. Conditions under which only zero profit equilibrium outcomes obtain in such settings are provided. We then illustrate through a series of examples that the conditions provided are "tight" in the sense that their relaxation leads to positive profit outcomes.

Keywords: Price competition; Discontinuity; Bertrand; Hotelling. (search for similar items in EconPapers)
JEL-codes: C72 D43 (search for similar items in EconPapers)
Date: 2001-10-29
Note: Received: April 7, 2000; revised version: September 14, 2000
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Citations: View citations in EconPapers (5)

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