IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v59y1992i1p163-176..html
   My bibliography  Save this article

Iterated Elimination of Dominated Strategies in a Bertrand-Edgeworth Model

Author

Listed:
  • Tilman Börgers

Abstract

We consider a Bertrand-Edgeworth model of price competition. Firms have identical and constant marginal costs and finite exogeneous capacities. Firms choose prices. Our interest is in the set of those prices which are left over after the iterated elimination of dominated strategies. We show that in two circumstances this set will be close to the set containing only the marketclearing (Walrasian) price: (i) if any n − 1 out of n firms assumed to be in the market have sufficient capacity to cover demand at marginal costs; (ii) if any given total capacity is owned by a very large number of very small firms.

Suggested Citation

  • Tilman Börgers, 1992. "Iterated Elimination of Dominated Strategies in a Bertrand-Edgeworth Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 163-176.
    • Handle: RePEc:oup:restud:v:59:y:1992:i:1:p:163-176.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/2297931
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roger Guesnerie, 2005. "Strategic Substitutabilities Versus Strategic Complementarities : Towards a General Theory of Expectational Coordination ?," Revue d'économie politique, Dalloz, vol. 115(4), pages 393-412.
    2. Moscarini, Giuseppe & Ottaviani, Marco, 2001. "Price Competition for an Informed Buyer," Journal of Economic Theory, Elsevier, vol. 101(2), pages 457-493, December.
    3. Roy Chowdhury, Prabal, 2008. "Bertrand-Edgeworth equilibrium with a large number of firms," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 746-761, May.
    4. Guesnerie, Roger, 1992. "Est-il rationnel d’avoir des anticipations rationnelles?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 68(4), pages 544-559, décembre.
    5. Germano, Fabrizio, 2003. "Bertrand-edgeworth equilibria in finite exchange economies," Journal of Mathematical Economics, Elsevier, vol. 39(5-6), pages 677-692, July.
    6. Jacobs, Martin & Requate, Till, 2016. "Bertrand-Edgeworth markets with increasing marginal costs and voluntary trading: Experimental evidence," Economics Working Papers 2016-01, Christian-Albrechts-University of Kiel, Department of Economics.
    7. García Díaz, Antón & Hernán González, Roberto & Kujal, Praveen, 2009. "List pricing and discounting in a Bertrand-Edgeworth duopoly," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 719-727, November.
    8. García Díaz, Antón & Kujal, Praveen, 1998. "List princing and pure strategy outcomes in a bertrand edgeworth duopoly," UC3M Working papers. Economics 6089, Universidad Carlos III de Madrid. Departamento de Economía.
    9. Mariotti, Marco, 2000. "Maximum Games, Dominance Solvability, and Coordination," Games and Economic Behavior, Elsevier, vol. 31(1), pages 97-105, April.
    10. Dhillon, Amrita & Lockwood, Ben, 2004. "When are plurality rule voting games dominance-solvable?," Games and Economic Behavior, Elsevier, vol. 46(1), pages 55-75, January.
    11. Xiao Luo & Xuewen Qian & Chen Qu, 2020. "Iterated elimination procedures," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(2), pages 437-465, September.
    12. Börgers, Tilman & Janssen, Maarten C.W., 1995. "On the dominance solvability of large cournot games," Games and Economic Behavior, Elsevier, vol. 8(2), pages 297-321.
    13. Prabal Roy Chowdhury, 2004. "Bertrand-Edgeworth equilibrium: Manipulable residual demand," Discussion Papers 04-15, Indian Statistical Institute, Delhi.
    14. Moulin, Hervé & Velez, Rodrigo A., 2013. "The price of imperfect competition for a spanning network," Games and Economic Behavior, Elsevier, vol. 81(C), pages 11-26.
    15. Prabal Roy Chowdhury, 2004. "Bertrand-Edgeworth equilibrium with a large number of firms," Discussion Papers 04-12, Indian Statistical Institute, Delhi.
    16. 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.
    17. Waddle, Roberts, 2005. "Strategic profit sharing between firms: the bertrand model," UC3M Working papers. Economics we050902, Universidad Carlos III de Madrid. Departamento de Economía.
    18. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:59:y:1992:i:1:p:163-176.. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.