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Bertrand-Edgeworth equilibrium with a large number of firms

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Author Info
Prabal Roy Chowdhury () (Indian Statistical Institute, New Delhi)

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Abstract

We examine a model of price competition where the firms simultaneously decide on both price and quantity, and are free to supply less than the quantity demanded. We demonstrate that if the tie-breaking rule is `non-manipulable', then, for a large class of rationing rules, there is a unique equilibrium in pure strategies whenever the number of firms is large enough. We then show that the `folk theorem' of perfect competition holds. Finally, we examine if the results go through when the firms are asymmetric, or produce to order.

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Publisher Info
Paper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 04-12.

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Length: 29 pages
Date of creation: Feb 2004
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Handle: RePEc:ind:isipdp:04-12

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Related research
Keywords: Bertrand equilibrium; pure strategy; non-manipulable tiebreaking rule;

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Find related papers by JEL classification:
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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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Massimo A. De Francesco, 2008. "Existence of pure strategy equilibrium in Bertrand-Edgeworth games with imperfect divisibility of money," Economics Bulletin, Economics Bulletin, vol. 12(29), pages 1-8. [Downloadable!]
    Other versions:
  2. Hirata, Daisuke, 2008. "Bertrand-Edgeworth Equilibrium in Oligopoly," MPRA Paper 7946, University Library of Munich, Germany. [Downloadable!]
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