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Bertrand competition with intermediation

Author

Listed:
  • Liang, Xiaoying
  • Xie, Lei
  • Yan, Houmin

Abstract

We consider a duopolistic Bertrand competition setting in which competing firms can turn into intermediaries. The intermediation option allows firms to take advantage of the rival firm’s low price. We then give conditions for the existence of equilibrium.

Suggested Citation

  • Liang, Xiaoying & Xie, Lei & Yan, Houmin, 2012. "Bertrand competition with intermediation," Economics Letters, Elsevier, vol. 116(1), pages 112-114.
  • Handle: RePEc:eee:ecolet:v:116:y:2012:i:1:p:112-114
    DOI: 10.1016/j.econlet.2012.01.019
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    References listed on IDEAS

    as
    1. Morton I. Kamien & Lode Li & Dov Samet, 1989. "Bertrand Competition with Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 553-567, Winter.
    2. 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.
    3. Blume, Andreas, 2003. "Bertrand without fudge," Economics Letters, Elsevier, vol. 78(2), pages 167-168, February.
    4. Kartik, Navin, 2011. "A note on undominated Bertrand equilibria," Economics Letters, Elsevier, vol. 111(2), pages 125-126, May.
    5. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    6. Xuanming Su, 2010. "Optimal Pricing with Speculators and Strategic Consumers," Management Science, INFORMS, vol. 56(1), pages 25-40, January.
    7. Larry Karp & Jeffrey M. Perloff, 2005. "When Promoters Like Scalpers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 477-508, June.
    8. Hackner, Jonas, 2000. "A Note on Price and Quantity Competition in Differentiated Oligopolies," Journal of Economic Theory, Elsevier, vol. 93(2), pages 233-239, August.
    9. Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
    10. Spulber, Daniel F, 1995. "Bertrand Competition When Rivals' Costs Are Unknown," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 1-11, March.
    11. 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.
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    More about this item

    Keywords

    Bertrand competition; Intermediation; Pure strategy;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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