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Bertrand Competition with Asymmetric Costs: A Solution in Pure Strategies

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Listed:
  • Demuynck, Thomas

    (universite libre de bruxelles)

  • Herings, P. Jean-Jacques

    (General Economics 1 (Micro))

  • Saulle, Riccardo D.

    (General Economics 1 (Micro))

  • Seel, Christian

    (General Economics 1 (Micro))

Abstract

We consider two versions of a Bertrand duopoly with asymmetric costs and homogeneous goods. They differ in whether predatory pricing is allowed. For each version, we derive the Myopic Stable Set in pure strategies as introduced by Demuynck, Herings, Saulle, and Seel (2017). We contrast our prediction to the prediction of Nash Equilibrium in mixed strategies.

Suggested Citation

  • Demuynck, Thomas & Herings, P. Jean-Jacques & Saulle, Riccardo D. & Seel, Christian, 2018. "Bertrand Competition with Asymmetric Costs: A Solution in Pure Strategies," Research Memorandum 002, Maastricht University, Graduate School of Business and Economics (GSBE).
  • Handle: RePEc:unm:umagsb:2018002
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    as
    1. Thomas Demuynck & P. Jean‚ÄźJacques Herings & Riccardo D. Saulle & Christian Seel, 2019. "The Myopic Stable Set for Social Environments," Econometrica, Econometric Society, vol. 87(1), pages 111-138, January.
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    Keywords

    Bertrand Competition; Asymmetric Costs; Myopic Stable Set;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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