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Bertrand competition with non-rigid capacity constraints

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  • Roy Chowdhury, Prabal

Abstract

We examine Bertrand competition with non-rigid capacity constraints, demonstrating that the set of pure strategy Nash equilibrium constitutes an interval. We then examine the properties of this set as (a) the number of firms becomes large and (b) the capacity cost increases.

Suggested Citation

  • Roy Chowdhury, Prabal, 2009. "Bertrand competition with non-rigid capacity constraints," Economics Letters, Elsevier, vol. 103(1), pages 55-58, April.
  • Handle: RePEc:eee:ecolet:v:103:y:2009:i:1:p:55-58
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    References listed on IDEAS

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    1. Dastidar, Krishnendu Ghosh, 1995. "On the Existence of Pure Strategy Bertrand Equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(1), pages 19-32, January.
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    7. Boccard, Nicolas & Wauthy, Xavier, 2000. "Bertrand competition and Cournot outcomes: further results," Economics Letters, Elsevier, vol. 68(3), pages 279-285, September.
    8. Maggi, Giovanni, 1996. "Strategic Trade Policies with Endogenous Mode of Competition," American Economic Review, American Economic Association, vol. 86(1), pages 237-258, March.
    9. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, January.
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    11. Novshek, William & Chowdhury, Prabal Roy, 2003. "Bertrand equilibria with entry: limit results," International Journal of Industrial Organization, Elsevier, vol. 21(6), pages 795-808, June.
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    Citations

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    Cited by:

    1. Subhayu Bandyopadhyay & Sugata Marjit & Lei Yang, 2010. "An evaluation of the employment effects of barriers to outsourcing," Working Papers 2010-030, Federal Reserve Bank of St. Louis.
    2. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2014. "Tacit Collusion in a One-Shot Game of Price Competition with Soft Capacity Constraints," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 427-442, June.
    3. Makoto Yano & Takashi Komatsubara, 2012. "Price Competition or Tacit Collusion," KIER Working Papers 807, Kyoto University, Institute of Economic Research.
    4. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2012. "Tacit collusion in a one-shot game of price competition with soft capacity constraints," Working Papers hal-00709093, HAL.
    5. Antoniou, Fabio & Fiocco, Raffaele & Guo, Dongyu, 2017. "Asymmetric price adjustments: A supply side approach," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 335-360.
    6. Antoniou, Fabio & Fiocco, Raffaele & Guo, Dongyu, 2017. "Asymmetric price adjustments: A supply side approach," Working Papers 2072/306511, Universitat Rovira i Virgili, Department of Economics.
    7. Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Working Papers halshs-01174291, HAL.

    More about this item

    Keywords

    Bertrand competition Capacity constraint;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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