IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Unrestricted Duopoly Competition: Equilibrium and Survival

Listed author(s):
  • Jaideep Roy

    (Trinity College, Dublin)

  • Torben Tranæs

    (Danish National Institute of Social Research)

This paper is inspired by the ever lasting discussions over Bertrand's (1883) price-deviation critique of Cournot's (1838) duopoly analysis. We consider a homogenous good duopoly with constant marginal costs and no capacity constraints, but we allow firms to set either a quantity, a price, or both. We derive two main results. First, this model has two duopoly equilibria, one where firms commit only to prices (Bertrand behavior) and one where they commit only to quantities (Cournot behavior), and it has equilibria supporting a perfect contestable market where one firm supplies the entire market at a price equal to marginal costs. Second, the Cournot behavior is best fit for survival in terms of evolutionary stability. This provides an argument for the existence of quantity-commitment institutions like auctions in oligopolistic markets for homogenous goods.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2002-01.

in new window

Length: 15 pages
Date of creation: Jun 2002
Handle: RePEc:kud:kuieci:2002-01
Contact details of provider: Postal:
Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark

Phone: (0045) 35 32 30 54
Fax: +45 35 32 30 00
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kud:kuieci:2002-01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.