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Market transparency and Bertrand competition

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  • KNAUFF, Malgorzata

Abstract

We investigate the effects of market transparency on prices in the Bertrand duopoly model for both the cases of strategic complementarities and strategic substitutes. For the former class of games “conventional wisdom” concerning prices is confirmed, since they decrease. The consumers are always better off with higher transparency but changes in firm's profits are ambiguous. For the latter class of games, an increase in market transparency may lead to an increase in one of the prices, which implies ambiguity in consumers' utility and firms' profits.

Suggested Citation

  • KNAUFF, Malgorzata, 2006. "Market transparency and Bertrand competition," CORE Discussion Papers 2006037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2006037
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-2006.html
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Małgorzata Knauff
      by Metablog Obserwatora Finansowego in Obserwator Finansowy on 2009-12-10 17:59:58

    More about this item

    Keywords

    Bertrand duopoly; market transparency;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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