Bertrand-Edgeworth competition with substantial horizontal product differentiation

DOI10.1016/J.MATHSOCSCI.2020.08.004MaRDI QIDQ2021334zbMATH OpenOpenAlexFDO

Authors Robert Somogyi

Publication date 26 April 2021

Published in Mathematical Social Sciences (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.1016/j.mathsocsci.2020.08.004

zbMATH Keywords

Bertrand-Edgeworth competitioncapacity constraintduopolyHotelling

Mathematics Subject Classification ID

Microeconomic theory (price theory and economic markets) (91B24)

Review text

The authors complements the Kreps and Scheinkman's approach on the capacity constraints' potential to relax price competition. Instead of assuming that products are either perfect or very close substitutes, he is looking at the interaction between capacity constraints and local monopoly power, by using a standard Hotelling setup. The high level of product differentiation results in a variety of equilibrium firm behavior and it generates at least one pure-strategy equilibrium for any capacity level.

Recommendations

• Bertrand competition with non-rigid capacity constraints
• Relaxing quality differentiation through capacity limitation: a note
• Bertrand competition and Cournot outcomes: Further results
• Bertrand Equilibrium with Capacity Constraints and Restricted Mobility
• Bertrand Equilibrium in a Differentiated Duopoly

Cites work

• Capacity constraints may restore the existence of an equilibrium in the Hotelling model
• Cournot outcomes under Bertrand-Edgeworth competition with demand uncertainty
• Market Size and Substitutability in Imperfect Competition: A Bertrand-Edgeworth-Chamberlin Model
• On Hotelling's "Stability in Competition"
• Partial privatization in mixed duopoly with price and quality competition
• Price and capacity competition
• Product differentiation in a Bertrand-Edgeworth duopoly

Cited in

(8)

• Capacity precommitment as a barrier to entry: A Bertrand-Edgeworth approach
• Relaxing quality differentiation through capacity limitation: a note
• The effects of green house gas costs on optimal pricing and production lotsize in an imperfect production system
• Cournot-Bertrand endogenous behavior in a differentiated oligopoly with entry deterrence
• Pricing for services with cross-segment externalities, capacity constraints, and competition
• Beckmann's Bertrand-Edgeworth duopoly model: new pure strategy equilibria
• Equilibrium existence in price-quantity games: a sunk cost paradox
• Hotelling bound: pricing and location with reservation prices

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