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Price symmetry in a duopoly with congestion

  • STEINBERG, Richard
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    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.

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    Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2000056.

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    Date of creation: 00 Dec 2000
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    Handle: RePEc:cor:louvco:2000056
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    1. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    2. André DE PALMA & Luc LERUTH, 1989. "Congestion and Game in Capacity: a Duopoly Analysis in the Presence of Network Externalities," Annales d'Economie et de Statistique, ENSAE, issue 15-16, pages 389-407.
    3. Levhari, David & Luski, Israel, 1978. "Duopoly pricing and waiting lines," European Economic Review, Elsevier, vol. 11(1), pages 17-35, February.
    4. R. Gibbens & R. Mason & Richard Steinberg, 2000. "Internet service classes under competition," LSE Research Online Documents on Economics 23577, London School of Economics and Political Science, LSE Library.
    5. Wilson, Robert B, 1989. "Efficient and Competitive Rationing," Econometrica, Econometric Society, vol. 57(1), pages 1-40, January.
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