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Bertrand competition with intermediation

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  • Liang, Xiaoying
  • Xie, Lei
  • Yan, Houmin

Abstract

We consider a duopolistic Bertrand competition setting in which competing firms can turn into intermediaries. The intermediation option allows firms to take advantage of the rival firm’s low price. We then give conditions for the existence of equilibrium.

Suggested Citation

  • Liang, Xiaoying & Xie, Lei & Yan, Houmin, 2012. "Bertrand competition with intermediation," Economics Letters, Elsevier, vol. 116(1), pages 112-114.
    • Handle: RePEc:eee:ecolet:v:116:y:2012:i:1:p:112-114
    DOI: 10.1016/j.econlet.2012.01.019
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    References listed on IDEAS

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    1. Morton I. Kamien & Lode Li & Dov Samet, 1989. "Bertrand Competition with Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 553-567, Winter.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bertrand competition; Intermediation; Pure strategy;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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