This paper formalizes, for the labor market, the traditional view that competition among the sellers leads to a fall in prices so long as there is excess supply. First we show that, at a Nash equilibrium of the one-period game, wages are set equal to the Walrasian wage. Then, similarly as in...

We consider a homogeneous product market where, given their capacities, existing firms compete in prices. First, pricing at the constant short-run average-marginal cost - i. e., Bertrand outcome - is shown to be a Nash equilibrium of the static price game provided total capacity is sufficiently...

We model long-run price competition as a two-stage entry-capacity and pricing game among many potential entrants. Each solution of the game is found to reproduce a long-run competitive equilibrium provided the latter is characterized by a sufficiently large market. This result extends to the...