Bertrand competition with asymmetric costs: a solution in pure strategies

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

doi:10.1007/s11238-019-09698-4

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

Microeconomics & Public Economics

Research output: Contribution to journal › Article › Academic › peer-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 language	English
Pages (from-to)	147-154
Number of pages	8
Journal	Theory and Decision
Volume	87
Issue number	2
DOIs	https://doi.org/10.1007/s11238-019-09698-4
Publication status	Published - Sept 2019

Keywords

Bertrand competition
Asymmetric costs
Myopic stable set

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10.1007/s11238-019-09698-4Licence: CC BY

Cite this

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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.",

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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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VL - 87

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JO - Theory and Decision

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Bertrand competition with asymmetric costs: a solution in pure strategies

Abstract

Keywords

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