Author: Subhasish Dugar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This article tests the prediction of three discrete asymmetric duopoly price competition games in the laboratory. The games differ from each other in terms of the size of the cost asymmetry that induces a systematic variation in the difference between the firms' marginal costs. While the standard theory requires the low-cost firm to set a price just equal to the high-cost firm's marginal cost, which is identical across all three games, and win the entire market, intuition suggests that market price may increase with a decrease in the absolute difference between the two marginal costs. We develop a quantal response equilibrium model to test our competing conjecture.
Bertrand Competition with Asymmetric Marginal Costs
Author: Subhasish Dugar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This article tests the prediction of three discrete asymmetric duopoly price competition games in the laboratory. The games differ from each other in terms of the size of the cost asymmetry that induces a systematic variation in the difference between the firms' marginal costs. While the standard theory requires the low-cost firm to set a price just equal to the high-cost firm's marginal cost, which is identical across all three games, and win the entire market, intuition suggests that market price may increase with a decrease in the absolute difference between the two marginal costs. We develop a quantal response equilibrium model to test our competing conjecture.
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This article tests the prediction of three discrete asymmetric duopoly price competition games in the laboratory. The games differ from each other in terms of the size of the cost asymmetry that induces a systematic variation in the difference between the firms' marginal costs. While the standard theory requires the low-cost firm to set a price just equal to the high-cost firm's marginal cost, which is identical across all three games, and win the entire market, intuition suggests that market price may increase with a decrease in the absolute difference between the two marginal costs. We develop a quantal response equilibrium model to test our competing conjecture.
The effect of asymmetric entry costs on Bertrand competition
Author:
Publisher: DIANE Publishing
ISBN: 1428958460
Category :
Languages : en
Pages : 26
Book Description
Publisher: DIANE Publishing
ISBN: 1428958460
Category :
Languages : en
Pages : 26
Book Description
The Size of the Cost Asymmetry and Bertrand Competition
Author: Subhasish Dugar
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
The static Nash equilibrium solution for a discretized Bertrand-duopoly market with asymmetric constant marginal costs recommends that the low-cost firm should charge a price equal to the high-cost firm's marginal cost, and thus steal the entire market. This sharp prediction holds true for any size of the cost asymmetry. We develop three stylized asymmetric duopoly price competition models, steadily vary the size of the cost asymmetry across these models, and experimentally investigate the impact of this variation on competition. We find that the predictive power of the Bertrand solution crucially depends on the size of the cost asymmetry; the deviation of the observed average market price from the static Nash price systematically increases as the degree of the asymmetry narrows. Thus, behaviorally a smaller cost asymmetry may lead to higher prices in a Bertrand-duopoly - a key insight valuable from an antitrust standpoint.
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
The static Nash equilibrium solution for a discretized Bertrand-duopoly market with asymmetric constant marginal costs recommends that the low-cost firm should charge a price equal to the high-cost firm's marginal cost, and thus steal the entire market. This sharp prediction holds true for any size of the cost asymmetry. We develop three stylized asymmetric duopoly price competition models, steadily vary the size of the cost asymmetry across these models, and experimentally investigate the impact of this variation on competition. We find that the predictive power of the Bertrand solution crucially depends on the size of the cost asymmetry; the deviation of the observed average market price from the static Nash price systematically increases as the degree of the asymmetry narrows. Thus, behaviorally a smaller cost asymmetry may lead to higher prices in a Bertrand-duopoly - a key insight valuable from an antitrust standpoint.
Bertrand Competition with Asymmetric Costs
Author: Thomas Demuynck
Publisher:
ISBN:
Category :
Languages : en
Pages : 10
Book Description
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.
Publisher:
ISBN:
Category :
Languages : en
Pages : 10
Book Description
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.
The Effect of Asymmetric Entry Costs on Bertrand Competition
Author: Charles J. Thomas
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 21
Book Description
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 21
Book Description
Correlated Equilibria in Homogenous Good Bertrand Competition
The Effect of Asymmetric Entry Costs on Bertrand Competition
Author: Charles Jonathan Thomas
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 21
Book Description
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 21
Book Description
On Bertrand Competition Under Not So Large an Excess of Total Capacity
Researches Into the Mathematical Principles of the Theory of Wealth
Author: Antoine Augustin Cournot
Publisher:
ISBN:
Category : Economics, Mathematical
Languages : en
Pages : 242
Book Description
Publisher:
ISBN:
Category : Economics, Mathematical
Languages : en
Pages : 242
Book Description
Bertrand Competition Without Completely Certain Production
Author: Sheldon Kimmel
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 42
Book Description
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 42
Book Description