Duopoly Experimentation: Cournot And Bertrand Competition
This paper analyzes how leaming behaviour can modify the outcome of competition in an industry facing demand uncertainty. We consider a duopoly game where firms have imperfect information about market demand and leam through observing prices (Coumot competition) or sales (Bertrand) . The main body of the paper consists in showing how duopoly experimentation is affected by the type of market competition. We find that, if the goods are substitutes, firms will experiment more under Bertrand than under Coumot. If the goods are complements, the result is reversed. Furthermore, there is less experimentation under Coumot with product substitution.
|Date of creation:||Jan 1991|
|Date of revision:|
|Publication status:||Published by Ivie|
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- Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
- Vives, X., 1988.
"Information And Competitive Advantage,"
UFAE and IAE Working Papers
100-88, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Antonio Villar Notario & Carmen Herrero Blanco, 1990.
"Vector mappings with diagonal images,"
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1990-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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