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Bertrand-Edgeworth Equilibrium in Oligopoly

Daisuke Hirata

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates simultaneous move capacity constrained price competition game among three firms. I find that equilibria in an asymmetric oligopoly are substantially different from those in the duopoly and symmetric oligopoly. I characterize mixed strategy equilibria and show there exist possibilities of i) the existence of a continuum of equilibria ii) the smallest firm earning the largest profit per capacity and iii) non-identical supports of equilibrium mixed strategies, all of which never arise either in the duopoly or symmetric oligopoly. In particular, the second finding sheds light on a completely new pricing incentive in Bertrand competitions.

Keywords: Price Competition; Oligopoly; Capacity Constraint; Homogeneous Goods (search for similar items in EconPapers)
JEL-codes: C72 L13 (search for similar items in EconPapers)
Date: 2008-03
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 (7) Track citations by RSS feed

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https://mpra.ub.uni-muenchen.de/7946/1/MPRA_paper_7946.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/7988/1/MPRA_paper_7988.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/7997/1/MPRA_paper_7997.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/8738/1/MPRA_paper_8738.pdf revised version (application/pdf)

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