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Bertrand competition with asymmetric costs: a solution in pure strategies

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  • Thomas Demuynck
  • Jean-Jacques Herings
  • Riccardo Saulle
  • Christian Seel

Abstract

We consider two versions of a Bertrand duopoly with asymmetric costs and homogeneous goods. They differ in whether predatory pricing is allowed. For each version, we derive the Myopic Stable Set in pure strategies as introduced by Demuynck, Herings, Saulle, and Seel (2017). We contrast our prediction to the prediction of Nash Equilibrium in mixed strategies.
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Suggested Citation

  • Thomas Demuynck & Jean-Jacques Herings & Riccardo Saulle & Christian Seel, 2019. "Bertrand competition with asymmetric costs: a solution in pure strategies," ULB Institutional Repository 2013/295316, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/295316
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    References listed on IDEAS

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    1. Thomas Demuynck & P. Jean‐Jacques Herings & Riccardo D. Saulle & Christian Seel, 2019. "The Myopic Stable Set for Social Environments," Econometrica, Econometric Society, vol. 87(1), pages 111-138, January.
    2. Blume, Andreas, 2003. "Bertrand without fudge," Economics Letters, Elsevier, vol. 78(2), pages 167-168, February.
    3. Kartik, Navin, 2011. "A note on undominated Bertrand equilibria," Economics Letters, Elsevier, vol. 111(2), pages 125-126, May.
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    Cited by:

    1. Soeren C. Schwuchow, 2023. "Organized crime as a link between inequality and corruption," European Journal of Law and Economics, Springer, vol. 55(3), pages 469-509, June.
    2. Bos, Iwan & Marini, Marco A. & Saulle, Riccardo D., 2024. "Myopic oligopoly pricing," Games and Economic Behavior, Elsevier, vol. 145(C), pages 377-412.
    3. Li, Zonghuo & Yang, Wensheng & Jin, Hyun Seung & Wang, Di, 2021. "Omnichannel retailing operations with coupon promotions," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).

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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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