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Price symmetry in a duopoly with congestion

Author

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  • HAIMANKO, Ori
  • STEINBERG, Richard

Abstract

We show that in a duopoly operating in a congested market, with a general congestion function and an arbitrary distribution of consumer disutility for congestion, there cannot exist an asymmetric Nash equilibrium. We also show that whenever an equilibrium does exist it is unique. Closed form expressions for the symmetric equilibrium prices and profits are provided.

Suggested Citation

  • HAIMANKO, Ori & STEINBERG, Richard, 2000. "Price symmetry in a duopoly with congestion," CORE Discussion Papers 2000056, Universit√© catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2000056
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-2000.html
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    References listed on IDEAS

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    1. repec:adr:anecst:y:1989:i:15-16:p:17 is not listed on IDEAS
    2. Gibbens, R. & Mason, R. & Steinberg, Richard, 2000. "Internet service classes under competition," LSE Research Online Documents on Economics 23577, London School of Economics and Political Science, LSE Library.
    3. Levhari, David & Luski, Israel, 1978. "Duopoly pricing and waiting lines," European Economic Review, Elsevier, vol. 11(1), pages 17-35, February.
    4. Wilson, Robert B, 1989. "Efficient and Competitive Rationing," Econometrica, Econometric Society, vol. 57(1), pages 1-40, January.
    5. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
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    Cited by:

    1. Zhang, Zhongju & Dey, Debabrata & Tan, Yong, 2008. "Price and QoS competition in data communication services," European Journal of Operational Research, Elsevier, vol. 187(3), pages 871-886, June.

    More about this item

    Keywords

    duopolistic pricing; congestion; symmetric equilibria; covered market.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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