Piecewise Linear Bertrand Oligopoly

Joachim Rosenmüller
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Joachim Rosenmüller: University of Bielefeld

A chapter in Perspectives on Operations Research, 2006, pp 425-443 from Springer

Abstract: Abstract We describe a modell of price competition between firms with piecewise linear cost functions. Thus, we consider “Bertrand oligopoly”, an n-person noncooperative game in which players choose prices and the market, reflected by a decreasing demand function, reacts discontinuously as total demand concentrates on those firms that offer minimal prices. Firms do not have to be identical. But a notion of similarity between firms is necessary in order to prove the existence of a Nash (-Bertrand) equilibrium. Here we are only interested in an equilibrium involving all firms — the case of subgroups with “similar” members deserves an additional study.

Keywords: Cost Function; Demand Function; Price Competition; Profit Function; Bertrand Equilibrium (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-8350-9064-4_23

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DOI: 10.1007/978-3-8350-9064-4_23

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