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Relative profit maximization and Bertrand equilibrium with convex cost functions

Satoh, Atsuhiro; Tanaka, Yasuhito - Institut für Weltwirtschaft (IfW) - 2014

The authors study pure strategy Bertrand equilibria in a duopoly in which two firms produce a homogeneous good with convex cost functions, and they seek to maximize the weighted sum of their absolute and relative profits. They show that there exists a range of the equilibrium price in...

Persistent link: https://www.econbiz.de/10010956106

Irrelevance of Conjectural Variations in Duopoly under Relative Profit Maximization and Consistent Conjectures

Satoh, Atsuhiro; Tanaka, Yasuhito - In: Journal of Economics and Management 10 (2014) 2, pp. 101-115

We study the equilibrium with the quantity setting behavior and price setting behavior of firms in a duopoly under relative profit maximization with constant conjectural variations, and arrive at the following results. 1) Conjectural variations of firms are irrelevant to the equilibrium of a...

Persistent link: https://www.econbiz.de/10010928982

Free entry oligopoly, Cournot, Bertrand and relative profit maximization

Satoh, Atsuhiro; Tanaka, Yasuhito - Volkswirtschaftliche Fakultät, … - 2015

We study a symmetric free entry oligopoly in which firms produce differentiated goods so as to maximize their relative profits. The relative profit of each firm is the difference between its profit and the average of the profits of other firms. We show that whether firms determine their outputs...

Persistent link: https://www.econbiz.de/10011272693

Relative profit maximization in duopoly: difference or ratio

Satoh, Atsuhiro; Tanaka, Yasuhito - Volkswirtschaftliche Fakultät, … - 2015

We compare formulations of relative profit maximization in duopoly with differentiated goods, 1) (Difference case) maximization of the difference between the profit of one firm and that of the other firm, 2) (Ratio case) maximization of the ratio of the profit of one firm to the total profit. We...

Persistent link: https://www.econbiz.de/10011272702

Relative Profit Maximization in Duopoly: Difference or Ratio

Satoh, Atsuhiro; Tanaka, Yasuhito - In: International Journal of Business and Economics 13 (2014) 2, pp. 127-141

We compare two formulations of relative profit maximization in duopoly with differentiated goods: (1) (difference case) maximization of the difference between the profit of one firm and that of the other firm and (2) (ratio case) maximization of the ratio of the profit of one firm to the total...

Persistent link: https://www.econbiz.de/10011274845

Free Entry Oligopoly, Cournot, Bertrand and Relative Profit Maximization

Satoh, Atsuhiro; Tanaka, Yasuhito - In: International Journal of Business and Economics 13 (2014) 2, pp. 143-155

Persistent link: https://www.econbiz.de/10011274851

Relative profit maximization in asymmetric oligopoly

Satoh, Atsuhiro; Tanaka, Yasuhito - Volkswirtschaftliche Fakultät, … - 2014

We analyze Bertrand and Cournot equilibria in an asymmetric oligopoly in which the firms produce differentiated … average marginal cost over the industry, its output at the Bertrand equilibrium is larger (smaller) than that at the Cournot … equilibrium, and the price of its good at the Bertrand equilibrium is lower (higher) than that at the Cournot equilibrium. …

Persistent link: https://www.econbiz.de/10011110443

Incentive for adoption of new technology in duopoly under absolute and relative profit maximization

Hattori, Masahiko; Tanaka, Yasuhito - Volkswirtschaftliche Fakultät, … - 2014

We present an analysis about adoption of new technology by firms in a duopoly with differentiated goods under absolute and relative profit maximization. Technology itself is free, but each firm must expend a fixed set-up cost, for example, for education of its staff. Under absolute profit...

Persistent link: https://www.econbiz.de/10011112210

Relative profit maximization and the choice of strategic variables in duopoly

Satoh, Atsuhiro; Tanaka, Yasuhito - Volkswirtschaftliche Fakultät, … - 2015

We study implications of the choice of strategic variables, price or quantity, by firms in a duopoly with differentiated goods in which each firm maximizes its relative profit. We consider general demand and cost functions, and show that the choice of strategic variables is irrelevant in the...

Persistent link: https://www.econbiz.de/10011207091

Relative profit maximization and Bertrand equilibrium with convex cost functions

Satoh, Atsuhiro; Tanaka, Yasuhito - In: Economics - The Open-Access, Open-Assessment E-Journal 8 (2014), pp. 1-15

This study derives pure strategy Bertrand equilibria in a duopoly in which two firms produce a homogeneous good with convex cost functions and seek to maximize the weighted sum of their absolute and relative profits. The study shows that there exists a range of equilibrium prices in duopolistic...

Persistent link: https://www.econbiz.de/10010961606