Bertrand competition with asymmetric costs: A solution in pure strategies

Thomas Demuynck; P.J.J. 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.J.J. Herings^*, Riccardo D. Saulle, Christian Seel

^*Corresponding author for this work

Research output: Contribution to journal › Article › Scientific › 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
Journal	Theory and Decision
Volume	87
Issue number	2
DOIs	https://doi.org/10.1007/s11238-019-09698-4
Publication status	Published - Sept 2019
Externally published	Yes

Keywords

Bertrand competition
Asymmetric costs
Myopic stable set

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10.1007/s11238-019-09698-4

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title = "Bertrand competition with asymmetric costs: A solution in pure strategies",

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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AU - Demuynck, Thomas

AU - Herings, P.J.J.

AU - Saulle, Riccardo D.

AU - Seel, Christian

PY - 2019/9

Y1 - 2019/9

N2 - 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.

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.

KW - Bertrand competition

KW - Asymmetric costs

KW - Myopic stable set

U2 - 10.1007/s11238-019-09698-4

DO - 10.1007/s11238-019-09698-4

M3 - Article

SN - 0040-5833

VL - 87

SP - 147

EP - 154

JO - Theory and Decision

JF - Theory and Decision

IS - 2

ER -

Bertrand competition with asymmetric costs: A solution in pure strategies

Abstract

Keywords

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