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Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation

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  • Xavier Wauthy

    ()
    (CEREC, Facultés universitaires Saint-Louis)

  • Nicolas Boccard

    ()
    (University of Girona)

Abstract

In this note, we consider a Bertrand-Edgeworth duopoly model in which products are differentiated ”à la Hotelling”. We assumine that only one of the two firms faces a capacity constraint. For this particular case, we characterize the equilibrium payoff of the unconstrained firm for the complete domain of capacity levels.

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File URL: http://www.accessecon.com/pubs/EB/2005/Volume12/EB-05L10008A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 12 (2005)
Issue (Month): 11 ()
Pages: 1-8

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Handle: RePEc:ebl:ecbull:eb-05l10008

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Keywords: Bertrand-Edgeworth Competition;

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References

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  1. Kala Krishna, 1985. "Trade Restrictions as Facilitating Practices," NBER Working Papers 1546, National Bureau of Economic Research, Inc.
  2. Lloyd S. Shapley & Martin Shubik, 1967. "Price Strategy Oligopoly with Product Variation," Cowles Foundation Discussion Papers 233, Cowles Foundation for Research in Economics, Yale University.
  3. Richard E. Levitan & Martin Shubik, 1970. "Price Duopoly and Capacity Constraints," Cowles Foundation Discussion Papers 287, Cowles Foundation for Research in Economics, Yale University.
  4. Benassy, Jean-Pascal, 1989. "Market Size and Substitutability in Imperfect Competition: A Bertrand-Edgeworth-Chamberlin Model," Review of Economic Studies, Wiley Blackwell, vol. 56(2), pages 217-34, April.
  5. Celia COSTA CABRAL & Praveen KUJAL & Emmanuel PETRAKIS, 1998. "Incentives for Cost Reducing Innovations under Quantitative Import Restraints," Annales d'Economie et de Statistique, ENSAE, issue 49-50, pages 479-493.
  6. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
  7. BOCCARD, Nicolas & WAUTHY, Xavier, . "Optimal quotas, price competition and products' attributes," CORE Discussion Papers RP -1685, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Dave Furth & Dan Kovenock, 1993. "Price leadership in a duopoly with capacity constraints and product differentiation," Journal of Economics, Springer, vol. 57(1), pages 1-35, February.
  9. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
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Cited by:
  1. Andrea Pierce & Debapriya Sen, 2014. "Outsourcing versus technology transfer: Hotelling meets Stackelberg," Journal of Economics, Springer, vol. 111(3), pages 263-287, April.

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