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Market Equilibria Compared: The Linear Case

Author

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  • Paolo Bertoletti

Abstract

Alternative market allocations are compared in a linear setting with product differentiation. With two commodities, assuming that both Ramsey and Cournot quantities are positive, the Cournotian quantities are shown to be not larger than their Bertrand counterparts, regardless of product substitutability. It also turns out that the case of a Bertrand price exceeding its Cournotian counterpart (which requires product complementarity) and the existence of a "subordinate" commodity receiving a negative price-cost margin à la Ramsey are equivalent conditions.

Suggested Citation

  • Paolo Bertoletti, 2026. "Market Equilibria Compared: The Linear Case," Working Papers 582, University of Milano-Bicocca, Department of Economics.
    • Handle: RePEc:mib:wpaper:582
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    Keywords

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    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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