EconPapers    
Economics at your fingertips  
 

Patterns of Competition with Captive Customers

Mark Armstrong () and John Vickers ()

MPRA Paper from University Library of Munich, Germany

Abstract: We study mixed-strategy equilibrium pricing in oligopoly settings where consumers vary in the set of suppliers they consider for their purchase---some being captive to a particular firm, some consider two particular firms, and so on. In the case of "nested reach" we find equilibria, unlike those in more standard models, in which firms are ranked in terms of the prices they might charge. We characterize equilibria in the three-firm case, and contrast them with equilibria in the parallel model with capacity constraints. A theme of the analysis is how patterns of consumer interaction with firms matter for competitive outcomes.

Keywords: Oligopoly; Bertrand competition; Bertrand-Edgeworth competition; Consideration sets; Mixed strategies (search for similar items in EconPapers)
JEL-codes: C72 D43 D83 L1 L15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind and nep-mic
Date: 2018-12-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/90362/1/MPRA_paper_90362.pdf original version (application/pdf)

Related works:
Working Paper: Patterns of Competition with Captive Customers (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:90362

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2019-12-09
Handle: RePEc:pra:mprapa:90362