Quality Uncertainty as Resolution of the Bertrand Paradox
AbstractWe show that in a homogeneous-good duopoly market with quality uncertainty and constant unit costs, the Bertrand paradox (i.e., marginal cost pricing) can be avoided.
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Bibliographic InfoPaper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2010-1.
Length: 6 pages
Date of creation: Jan 2010
Date of revision:
oligopoly; endogenous preferences; threshold utility;
Other versions of this item:
- Attila Tasnádi & Trenton G. Smith & Andrew S. Hanks, 2012. "Quality Uncertainty as Resolution of the Bertrand Paradox," Pacific Economic Review, Wiley Blackwell, vol. 17(5), pages 687-692, December.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-03-07 (Agricultural Economics)
- NEP-ALL-2009-03-07 (All new papers)
- NEP-MIC-2009-03-07 (Microeconomics)
- NEP-MKT-2009-03-07 (Marketing)
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- Andrew Hanks & Trenton Smith & Attila Tasnadi, 2010. "Opportunity Knocks: An Economic Analysis of Television Advertisements," Working Papers 2010-18, School of Economic Sciences, Washington State University.
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