Prabal, Roy Chowdhury (2008): Bertrand Competition with Non-rigid Capacity Constraints.
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We examine a model of Bertrand competition with non-rigid capacity constraints, so that by incurring an additional cost, firms can produce beyond capacity. We find that there is an interval of prices such that a price can be sustained as a pure strategy Nash equilibrium if and only if it lies in this interval. We then examine the properties of this set as (a) the number of firms becomes large and (b) the capacity cost increases.
|Item Type:||MPRA Paper|
|Original Title:||Bertrand Competition with Non-rigid Capacity Constraints|
|Subjects:||D - Microeconomics > D5 - General Equilibrium and Disequilibrium
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior
|Depositing User:||Prabal Roy Chowdhury|
|Date Deposited:||17. Jun 2008 13:59|
|Last Modified:||12. Feb 2013 12:18|
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