Market Size and Substitutability in Imperfect Competition: A Bertrand-Edgeworth-Chamberlin Model
AbstractThis paper examines the role of market size in a model of price competition with imperfect substitutes that bridges the Chamberlin and Bertrand-Edgeworth approaches. The author investigates the role of two fundamental parameters in the existence of an equilibrium: the market size, given by the number of competitors, and the degree of substitutability. He proves that (1) for a given number of competitors, a sufficiently large, but finite, degree of substitutability entails nonexistence; and (2) conversely, for a given upper bound on the degree of substitutability, a sufficiently large number of competitors ensures existence. He finally investigates the proximity of an equilibrium (when it exists) to a "competitive outcome," and finds that both high substitutability and large market size are a condition for competitiveness. Copyright 1989 by The Review of Economic Studies Limited.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Economic Studies.
Volume (Year): 56 (1989)
Issue (Month): 2 (April)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- BOCCARD, Nicolas & WAUTHY, Xavier, .
"Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation,"
CORE Discussion Papers RP
-1867, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Xavier Wauthy & Nicolas Boccard, 2005. "Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation," Economics Bulletin, AccessEcon, vol. 12(11), pages 1-8.
- Sinitsyn, Maxim, 2008.
"Characterization of the support of the mixed strategy price equilibria in oligopolies with heterogeneous consumers,"
Elsevier, vol. 99(2), pages 242-245, May.
- Maxim Sinitsyn, 2007. "Characterization Of The Support Of The Mixed Strategy Price Equilibria In Oligopolies With Heterogeneous Consumers," Departmental Working Papers 2007-08, McGill University, Department of Economics.
- Kaas, Leo & Madden, Paul, 1999.
"Equilibrium Involuntary Unemployment under Oligempory,"
68, Institute for Advanced Studies.
- L Kaas & P Madden, 2002. "Equilibrium Involuntary Unemployment Under Oligempory," Centre for Growth and Business Cycle Research Discussion Paper Series 21, Economics, The Univeristy of Manchester.
- L Kaas & P Madden, 2002. "Equilibrium Involuntary Unemployment under Oligempory," The School of Economics Discussion Paper Series 0213, Economics, The University of Manchester.
- J-Fr. Fagnart & Omar Licandro & H. R. Sneessens, .
"Capacity utilization and market power,"
- Fagnart, J.-Fr. & Licandro, O. & Sneessens, H. R., 1995. "Capacity Utilization and Market Power," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1996006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Daron Acemoglu & Asuman Ozdaglar, 2005.
"Competition and Efficiency in Congested Markets,"
NBER Working Papers
11201, National Bureau of Economic Research, Inc.
- Sinitsyn, Maxim, 2009. "Price dispersion in duopolies with heterogeneous consumers," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 197-205, March.
- Wambach, Achim, 1999. "Bertrand competition under cost uncertainty," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 941-951, October.
- Canoy, Marcel & Weddepohl, Claus, 1995. "Alternative conjectures in a Bertrand-Edgeworth model," European Journal of Political Economy, Elsevier, vol. 11(3), pages 577-598, September.
- Vives, Xavier, 2004.
"Innovation and Competitive Pressure,"
CEPR Discussion Papers
4369, C.E.P.R. Discussion Papers.
- Vives, Xavier, 2005. "Innovation and Competitive Pressure," Department of Economics, Working Paper Series qt1s1059vr, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Vives, Xavier, 2006. "Innovation and competitive pressure," IESE Research Papers D/634, IESE Business School.
- repec:ebl:ecbull:v:12:y:2005:i:11:p:1-8 is not listed on IDEAS
- Antoine D'Autume, 1992. "Théorie des jeux et marché," Cahiers d'Économie Politique, Programme National Persée, vol. 20(1), pages 155-165.
- Tasnádi, Attila, 2001.
"A Bertrand-Edgeworth-oligopóliumok. Irodalmi áttekintés
[Bertrand-Edgeworth oligopolies - a survey of the literature]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1081-1092.
- Erdem Basci & Ismail Saðlam, 2001. "Bertrand-Edgeworth Equilibrium in a Cash-Advance Economy," Departmental Working Papers 0104, Bilkent University, Department of Economics.
- Thepot, Jacques, 1995. "Bertrand oligopoly with decreasing returns to scale," Journal of Mathematical Economics, Elsevier, vol. 24(7), pages 689-718.
- Bertrand–Edgeworth model in Wikipedia English ne '')
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.