Bertrand and Price-Taking Equilibria in Markets with Product Differentiation

German Coloma ()

No 369, CEMA Working Papers: Serie Documentos de Trabajo. from Universidad del CEMA

Abstract: In this paper we show that a homogeneous-product market with multiple Bertrand equilibria becomes a market with a single Bertrand equilibrium when we introduce a small degree of product differentiation. When differentiation tends to zero, that Bertrand equilibrium converges to the unique price-taking equilibrium of the homogeneous-product market, which is in turn one of the multiple Bertrand equilibria for that market.

Keywords: Bertrand equilibrium; price-taking equilibrium; product differentiation (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2008-02
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cem:doctra:369

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