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Bertrand equilibrium with subadditive costs

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  • Dastidar, Krishnendu Ghosh

Abstract

We show here, in contrast to recent results, that if firms have different cost functions (that are strictly subadditive), such that the 'monopoly breakeven prices' are different, then in a homogeneous product duopoly there is always a Bertrand equilibrium (either in pure strategies or in mixed strategies).

Suggested Citation

  • Dastidar, Krishnendu Ghosh, 2011. "Bertrand equilibrium with subadditive costs," Economics Letters, Elsevier, vol. 112(2), pages 202-204, August.
    • Handle: RePEc:eee:ecolet:v:112:y:2011:i:2:p:202-204
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    References listed on IDEAS

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    1. Blume, Andreas, 2003. "Bertrand without fudge," Economics Letters, Elsevier, vol. 78(2), pages 167-168, February.
    2. Steffen Hoernig, 2007. "Bertrand Games and Sharing Rules," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(3), pages 573-585, June.
    3. Saporiti Alejandro & Coloma Germán, 2010. "Bertrand Competition in Markets with Fixed Costs," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-30, June.
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    Cited by:

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    3. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2020. "A general model of price competition with soft capacity constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 95-120, July.
    4. Marie‐Laure Cabon‐Dhersin & Nicolas Drouhin, 2014. "Tacit Collusion in a One‐Shot Game of Price Competition with Soft Capacity Constraints," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 427-442, June.
    5. Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Working Papers halshs-01174291, HAL.

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