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Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation

Author

Listed:
  • Xavier Wauthy

    () (CEREC, Facultés universitaires Saint-Louis)

  • Nicolas Boccard

    () (University of Girona)

Abstract

In this note, we consider a Bertrand-Edgeworth duopoly model in which products are differentiated ”à la Hotelling”. We assumine that only one of the two firms faces a capacity constraint. For this particular case, we characterize the equilibrium payoff of the unconstrained firm for the complete domain of capacity levels.

Suggested Citation

  • Xavier Wauthy & Nicolas Boccard, 2005. "Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation," Economics Bulletin, AccessEcon, vol. 12(11), pages 1-8.
  • Handle: RePEc:ebl:ecbull:eb-05l10008
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    References listed on IDEAS

    as
    1. Shapley, Lloyd S & Shubik, Martin, 1969. "Price Strategy Oligopoly with Product Variation," Kyklos, Wiley Blackwell, vol. 22(1), pages 30-44.
    2. Nicolas Boccard & Xavier Wauthy, 2003. "Optimal Quotas, Price Competition And Products' Attributes," The Japanese Economic Review, Japanese Economic Association, vol. 54(4), pages 395-408.
    3. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, vol. 26(3-4), pages 251-270, May.
    4. Dave Furth & Dan Kovenock, 1993. "Price leadership in a duopoly with capacity constraints and product differentiation," Journal of Economics, Springer, vol. 57(1), pages 1-35, February.
    5. Celia Costa Cabral & Praveen Kujal & Emmanuel Petrakis, 1998. "Incentives for Cost Reducing Innovations under Quantitative Import Restraints," Annals of Economics and Statistics, GENES, issue 49-50, pages 479-493.
    6. Jean-Pascal Benassy, 1989. "Market Size and Substitutability in Imperfect Competition: A Bertrand-Edgeworth-Chamberlin Model," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 217-234.
    7. Levitan, Richard & Shubik, Martin, 1972. "Price Duopoly and Capacity Constraints," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 111-122, February.
    8. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    9. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
    10. repec:adr:anecst:y:1998:i:49-50:p:18 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Andrea Pierce & Debapriya Sen, 2014. "Outsourcing versus technology transfer: Hotelling meets Stackelberg," Journal of Economics, Springer, vol. 111(3), pages 263-287, April.
    2. WAUTHY, Xavier Y., 2014. "From Bertrand to Cournot via Kreps and Scheinkman: a hazardous journey," CORE Discussion Papers 2014026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item

    Keywords

    Bertrand-Edgeworth Competition;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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