Bertrand-Edgeworth duopoly with linear costs: A tale of two paradoxes

Consider a Bertrand-Edgeworth duopoly with linear cost functions. If the firms produce to stock then no Nash equilibrium in pure strategies exists. If, however, the firms produce to order then all subgame perfect Nash equilibria involve the firms charging a price equal to marginal cost.

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Year of publication:	2004-02
Authors:	Chowdhury, Prabal Roy
Institutions:	Indian Statistical Institute
Subject:	Bertrand paradox \| Edgeworth paradox \| linear cost

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Extent:	application/pdf
Series:	Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	11 pages
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; D41 - Perfect Competition ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004979319