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

Cite this

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Bertrand competition with asymmetric costs : a solution in pure strategies. / Demuynck, Thomas; Herings, P. Jean-Jacques; Saulle, Riccardo D.; Seel, Christian.

In: Theory and Decision, Vol. 87, No. 2, 09.2019, p. 147-154.

Research output: Contribution to journalArticleAcademicpeer-review

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AU - Demuynck, Thomas

AU - Herings, P. Jean-Jacques

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AU - Seel, Christian

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AB - 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.

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KW - Asymmetric costs

KW - Myopic stable set

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