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Price Equilibria in Pure Strategies for Homogeneous Oligopoly

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  • Allen, Beth
  • Thisse, Jacques-Francois

Abstract

For a homogeneous product oligopoly market, possibilities for pure strategy Nash equilibria in prices are studied. Consumers, who each nonstrategically purchase one unit up to a common reservation price, are hypothesized to be more concerned with large price differences (and therefore buy from the cheapest firm) than slightly different prices. For the duopoly case, existence, uniqueness, and characterization results are provided. Linear examples are given with 2 and n firms. Copyright 1992 by MIT Press.

Suggested Citation

  • Allen, Beth & Thisse, Jacques-Francois, 1992. "Price Equilibria in Pure Strategies for Homogeneous Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(1), pages 63-81, Spring.
    • Handle: RePEc:bla:jemstr:v:1:y:1992:i:1:p:63-81
    DOI: 10.1111/j.1430-9134.1992.00063.x
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    References listed on IDEAS

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    1. Jeffrey M. Perloff & Steven C. Salop, 1985. "Equilibrium with Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 107-120.
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    8. Hildegard DIERKER, 1989. "Existence of Nash Equilibrium in Pure Strategies in an Oligopoly With Price Setting Firms," Vienna Economics Papers vie8902, University of Vienna, Department of Economics.
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    2. Soeiro, Renato & Adrego Pinto, Alberto, 2019. "Social power as a solution to the Bertrand Paradox," MPRA Paper 94271, University Library of Munich, Germany.
    3. Schmitt, Stefanie Y., 2022. "Competition with limited attention to quality differences," BERG Working Paper Series 184, Bamberg University, Bamberg Economic Research Group.
    4. Michael Grubb, 2015. "Failing to Choose the Best Price: Theory, Evidence, and Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 47(3), pages 303-340, November.
    5. Canoy, Marcel & Weddepohl, Claus, 1995. "Alternative conjectures in a Bertrand-Edgeworth model," European Journal of Political Economy, Elsevier, vol. 11(3), pages 577-598, September.
    6. Renato Soeiro & Alberto A. Pinto, 2023. "Negative network effects and asymmetric pure price equilibria," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 22(1), pages 99-124, January.

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