Hirata, Daisuke (2008): Bertrand-Edgeworth Equilibrium in Oligopoly.
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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.
|Item Type:||MPRA Paper|
|Original Title:||Bertrand-Edgeworth Equilibrium in Oligopoly|
|Keywords:||Price Competition, Oligopoly, Capacity Constraint, Homogeneous Goods|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
|Depositing User:||Daisuke Hirata|
|Date Deposited:||29. Mar 2008 19:27|
|Last Modified:||06. Jul 2015 16:21|
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Bertrand-Edgeworth Equilibrium in Oligopoly. (deposited 28. Mar 2008 17:20)
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