Equilibrium existence with spillover demand

I. Bos*, D. Vermeulen

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


Non-existence of a pure-strategy Nash equilibrium is a persistent problem in oligopoly models where sellers compete in prices and quantities. At the heart of this problem are unserved customers who are still willing to visit a less preferred supplier (i.e., so-called spillover demand). This note develops a consumer behavior model with spillover demand. Within this model there is a class of demand specifications for which a pure-strategy Nash equilibrium exists. This price-quantity equilibrium is shown to coincide with the Bertrand price equilibrium.
Original languageEnglish
Article number110061
Number of pages4
JournalEconomics Letters
Publication statusPublished - 1 Nov 2021

JEL classifications

  • d40 - Market Structure and Pricing: General
  • l10 - Market Structure, Firm Strategy, and Market Performance: General


  • Bertrand-Edgeworth competition
  • Edgeworth paradox
  • Oligopoly theory
  • Price-quantity competition
  • Spillover demand


Dive into the research topics of 'Equilibrium existence with spillover demand'. Together they form a unique fingerprint.

Cite this