Bertrand Competition with Asymmetric Costs: A Solution in Pure Strategies

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

Research output: Working paperProfessional

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Abstract

We consider two versions of a Bertrand duopoly with asymmetric costs and homogeneous goods. They differ in whether predatory pricing is allowed. For each version, we derive the Myopic Stable Set in pure strategies as introduced by Demuynck, Herings, Saulle, and Seel (2017). We contrast our prediction to the prediction of Nash Equilibrium in mixed strategies.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
DOIs
Publication statusPublished - 8 Feb 2018

Publication series

SeriesGSBE Research Memoranda
Number002

JEL classifications

  • c70 - Game Theory and Bargaining Theory: General
  • c72 - Noncooperative Games
  • d43 - Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection

Keywords

  • Bertrand Competition
  • Asymmetric Costs
  • Myopic Stable Set

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