Bertrand competition under cost uncertainty

Article Abstract:

The Bertrand paradox works under the assumption that two companies are sufficient in restoring perfect competition. However, in a risky environment, risk-averse companies in an oligopoly have the tendency to charge a higher price the competitive price. If there is a chance of incurring higher losses, despite increasing expected profits many companies will continue to be afraid of taking over the entire market. This posits that the Bertrand paradox is not valid.

Economic Views, Economic aspects, Economic policy, Monopolistic competition, Oligopolies

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Collusion under yardstick competition: an experimental study

Article Abstract:

Collusion as a strategy where relative performance evaluation schemes like yardstick competition, leads to lower degree of effectiveness of the schemes. In repeated game settings, chances of collusion get more likely as the rents get smaller to the agents. Two performance evaluation schemes are examined in an economic experiment with interesting results.

Germany

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