Anderson, S.P.; Renault, R. - Groupe de Recherche en Économie Mathématique et … - 1997
Bertrand argued that price would be driven down to marginal cost even with only two firms in the market. Chamberlin, by introducing product differentiation, argued that price will exceed marginal cost even when there are many firms. Thus product differentiation resolves the "Bertrand Paradox"....