A model of multiproduct price competition
Article Abstract:
Utilization of a simple multiproduct price competition model revealed the presence of a complete strategy equilibrium. The equilibrium becomes efficient when overall social surplus is maximized. Moreover, an equilibrium outcome is obtained when the willingness to pay function of the consumer is convex. This signifies weak competition and the surplus is being taken by the firms. On the other hand, a concave willingness to pay function reveals that the equilibrium price of a product also marginally accounts for the total willingness to pay.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1997
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On the dynamic efficiency of Bertrand and Cournot equilibria
Article Abstract:
A comparison of Cournot and Bertrand equilibria in duopolies with research and development competition reveals that Cournot competition is a better driver of R and D efforts than Bertrand but the values are inversely proportional to efficiency of the equilibria. Moreover, Cournot equilibria is more efficient when R and D productivity is high, spillovers are low and goods are interrelated. Bertrand equilibria however is a better measure when the opposite productivity os low, spillovers are hgh and goods cannot be interchanged.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1997
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Comparing Cournot and Bertrand in a homogenous product market
Article Abstract:
An evaluation of Bertrand and Cournot equilibrium in a homogenous product market reveals that the point of comparison of the two equilibrium lies in the sensitivity of Cournot statistics to market sharing rules. The study also shows that results using Bertrand equations may not hold when costs are asymmetric if the 'capacity sharing rule' does not apply to the homogenous market unlike in the diversified market.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1997
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