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Price symmetry in a duopoly with congestion

Author

Listed:
  • 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," LIDAM Discussion Papers CORE 2000056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2000056
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2000.html
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    References listed on IDEAS

    as
    1. 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.
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    4. Levhari, David & Luski, Israel, 1978. "Duopoly pricing and waiting lines," European Economic Review, Elsevier, vol. 11(1), pages 17-35, February.
    5. Wilson, Robert B, 1989. "Efficient and Competitive Rationing," Econometrica, Econometric Society, vol. 57(1), pages 1-40, January.
    6. André De Palma & Luc Leruth, 1989. "Congestion and Game in Capacity: a Duopoly Analysis in the Presence of Network Externalities," Annals of Economics and Statistics, GENES, issue 15-16, pages 389-407.
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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.

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    More about this item

    Keywords

    duopolistic pricing; congestion; symmetric equilibria; covered market.;
    All these keywords.

    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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