Bertrand competition when rivals' costs are unknown

Article Abstract:

The conjecture of the Bertrand model of competition that price competition results in zero profit was investigated. The model implies that two very similar firms with equal marginal costs will be perfectly competitive. The Bertrand conjecture was examined from a viewpoint that the firms have little knowledge of their competitor's costs. The implications of asymmetric information on the model were also examined. It was concluded that in the short-run, asymmetric information could lessen competition since firms with higher prices will earn higher profits. For the long-run, however, asymmetric information will serve as an incentive to competition due to the expectation of higher profits.

Models, Competition (Economics), Pricing, Cost (Economics), Costs (Economics)

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Note on risk aversion and sharing of firm-specific information in duopolies

Article Abstract:

A study was conducted to extend research work on risk aversion and duopoly preference for information sharing. The study assumes that market uncertainty is generated by firm-specific costs rather than industry-wide demand. Results show that under such uncertainty conditions, firms choose not to share market information. In addition, these markets are established such that information sharing gains are dominated by risk cost reactions.

Duopolies, Risk perception

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The provision of information in a Bertrand oligopoly

Article Abstract:

A study was conducted to evaluate the role of information in a market characterized by a Bertrand oligopoly. The study assumes that consumers have incomplete product information and make their choices on the best possible products within their limits. In addition, information availability is conditioned by firms in the market. Results show that incomplete information maintains a level of expected profits for monopolistic firms.

Oligopolies

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