Within a simple model of homogeneous oligopoly, we show that the traditional ranking between Bertrand and Cournot equilibria may be reversed. For price setting entails a continuum of price equilibria under convex variable costs, departure from marginal cost pricing may be observed. As a consequence, Bertrand–Nash equilibrium profits (welfare) may be higher (lower) than Cournot–Nash ones. The reversal of the standard rankings occurs when pricing strategies mimic collusive behaviour.
Titolo: | Bertrand versus Cournot with convex variable costs |
Autore/i: | DELBONO, FLAVIO; LAMBERTINI, LUCA |
Autore/i Unibo: | |
Anno: | 2016 |
Rivista: | |
Digital Object Identifier (DOI): | http://dx.doi.org/10.1007/s40505-015-0072-x |
Abstract: | Within a simple model of homogeneous oligopoly, we show that the traditional ranking between Bertrand and Cournot equilibria may be reversed. For price setting entails a continuum of price equilibria under convex variable costs, departure from marginal cost pricing may be observed. As a consequence, Bertrand–Nash equilibrium profits (welfare) may be higher (lower) than Cournot–Nash ones. The reversal of the standard rankings occurs when pricing strategies mimic collusive behaviour. |
Data stato definitivo: | 2020-03-26T11:00:18Z |
Appare nelle tipologie: | 1.01 Articolo in rivista |
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