Bertrand competition with asymmetric costs: a solution in pure strategies

Thomas Demuynck, P. Jean-Jacques Herings*, Riccardo D. Saulle, Christian Seel

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We consider a Bertrand duopoly with homogeneous goods and we allow for asymmetric marginal costs. We derive the Myopic Stable Set in pure strategies as introduced by Demuynck et al. (Econometrica 87:111-138, 2019). In contrast to the set of Nash equilibria, the unique Myopic Stable Set can be easily characterized in closed form and it provides an intuitive set-valued prediction.
Original languageEnglish
Pages (from-to)147-154
Number of pages8
JournalTheory and Decision
Volume87
Issue number2
DOIs
Publication statusPublished - Sep 2019

Keywords

  • Bertrand competition
  • Asymmetric costs
  • Myopic stable set

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