Bertrand-Edgeworth duopoly with linear costs: A tale of two paradoxes
AbstractConsider a Bertrand-Edgeworth duopoly with linear cost functions. If the firms produce to stock then no Nash equilibrium in pure strategies exists. If, however, the firms produce to order then all subgame perfect Nash equilibria involve the firms charging a price equal to marginal cost.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 88 (2005)
Issue (Month): 1 (July)
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Web page: http://www.elsevier.com/locate/ecolet
Other versions of this item:
- Prabal Roy Chowdhury, 2004. "Bertrand-Edgeworth duopoly with linear costs: A tale of two paradoxes," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 04-13, Indian Statistical Institute, New Delhi, India.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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