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Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation

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  • BOCCARD, Nicolas
  • WAUTHY, Xavier

Abstract

In this note, we consider a Bertrand-Edgeworth duopoly model in which products are differentiated ”à la Hotelling”. We assumine that only one of the two firms faces a capacity constraint. For this particular case, we characterize the equilibrium payoff of the unconstrained firm for the complete domain of capacity levels.
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Suggested Citation

  • BOCCARD, Nicolas & WAUTHY, Xavier, 2005. "Equilibrium payoffs in a Bertrand-Edgeworth model with product differentiation," LIDAM Reprints CORE 1867, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1867
    Note: In : Economics Bulletin, 12(11), 1-8, 2005
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    References listed on IDEAS

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    1. Celia Costa Cabral & Praveen Kujal & Emmanuel Petrakis, 1998. "Incentives for Cost Reducing Innovations under Quantitative Import Restraints," Annals of Economics and Statistics, GENES, issue 49-50, pages 479-493.
    2. Jean-Pascal Benassy, 1989. "Market Size and Substitutability in Imperfect Competition: A Bertrand-Edgeworth-Chamberlin Model," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(2), pages 217-234.
    3. Levitan, Richard & Shubik, Martin, 1972. "Price Duopoly and Capacity Constraints," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 111-122, February.
    4. Nicolas Boccard & Xavier Wauthy, 2003. "Optimal Quotas, Price Competition And Products' Attributes," The Japanese Economic Review, Japanese Economic Association, vol. 54(4), pages 395-408, December.
    5. repec:adr:anecst:y:1998:i:49-50:p:18 is not listed on IDEAS
    6. Lloyd Shapley & Martin Shubik, 1969. "Price Strategy Oligopoly With Product Variation," Kyklos, Wiley Blackwell, vol. 22(1), pages 30-44, February.
    7. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    8. Krishna, Kala, 1989. "Trade restrictions as facilitating practices," Journal of International Economics, Elsevier, vol. 26(3-4), pages 251-270, May.
    9. Dave Furth & Dan Kovenock, 1993. "Price leadership in a duopoly with capacity constraints and product differentiation," Journal of Economics, Springer, vol. 57(1), pages 1-35, February.
    10. James W. Friedman, 1988. "On the Strategic Importance of Prices versus Quantities," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 607-622, Winter.
    11. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
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    Cited by:

    1. Andrea Pierce & Debapriya Sen, 2014. "Outsourcing versus technology transfer: Hotelling meets Stackelberg," Journal of Economics, Springer, vol. 111(3), pages 263-287, April.
    2. WAUTHY, Xavier Y., 2014. "From Bertrand to Cournot via Kreps and Scheinkman: a hazardous journey," LIDAM Discussion Papers CORE 2014026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Jason J. Lepore & Aric P. Shafran, 2013. "Consumer Rationing and Cournot Outcomes: Experimental Evidence," Southern Economic Journal, John Wiley & Sons, vol. 79(3), pages 727-746, January.

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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