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Convexity of Bertrand oligopoly TU-games with differentiated products

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  • Aymeric Lardon

    (Université Côte d’Azur)

Abstract

We consider Bertrand oligopoly TU-games with differentiated products. We assume that the demand system is Shubik’s and that firms operate at a constant and identical marginal and average cost. Our main results state that Bertrand oligopoly TU-games in $$\alpha $$α, $$\beta $$β and $$\gamma $$γ-characteristic function form satisfy the convexity property, meaning that there exist strong incentives for large-scale cooperation between firms on prices.

Suggested Citation

  • Aymeric Lardon, 2020. "Convexity of Bertrand oligopoly TU-games with differentiated products," Annals of Operations Research, Springer, vol. 287(1), pages 285-302, April.
    • Handle: RePEc:spr:annopr:v:287:y:2020:i:1:d:10.1007_s10479-019-03351-7
    DOI: 10.1007/s10479-019-03351-7
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    More about this item

    Keywords

    Bertrand competition; Cooperation; Core; Convexity;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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