Bertrand-Edgeworth Equilibrium in Oligopoly
This paper investigates simultaneous move capacity constrained price competition game among three firms. I find that equilibria in an asymmetric oligopoly are substantially different from those in the duopoly and symmetric oligopoly. I characterize mixed strategy equilibria and show there exist possibilities of i) the existence of a continuum of equilibria ii) the smallest firm earning the largest profit per capacity and iii) non-identical supports of equilibrium mixed strategies, all of which never arise either in the duopoly or symmetric oligopoly. In particular, the second finding sheds light on a completely new pricing incentive in Bertrand competitions.
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83-08, C.V. Starr Center for Applied Economics, New York University.
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- repec:ebl:ecbull:v:4:y:2003:i:30:p:1-8 is not listed on IDEAS
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