Correlated equilibria in homogenous good Bertrand competition
Ole Jann and
No 14-17, Discussion Papers from University of Copenhagen. Department of Economics
We show that there is a unique correlated equilibrium, identical to the unique Nash equilibrium, in the classic Bertrand oligopoly model with homogenous goods. This provides a theoretical underpinning for the so-called "Bertrand paradox" and also generalizes earlier results on mixed-strategy Nash equilibria. Our proof generalizes to asymmetric marginal costs and arbitrarily many players.
Keywords: Bertrand paradox; correlated equilibrium; price competition (search for similar items in EconPapers)
JEL-codes: C72 D43 L13 (search for similar items in EconPapers)
Pages: 17 pages
New Economics Papers: this item is included in nep-com, nep-ger, nep-gth, nep-hpe and nep-mic
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Journal Article: Correlated equilibria in homogeneous good Bertrand competition (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1417
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