On strategic complementarity conditions in Bertrand oligopoly |
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Authors: | Rabah Amir Isabel Grilo |
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Institution: | (1) CORE and Department of Economics, Université Catholique de Louvain, 34 voie du Roman Pays, 1348 Louvain-la-Neuve, BELGIUM (e-mail: amir@core.ucl.ac.be), , BE;(2) School of Economic Studies, University of Manchester, Manchester, UK , GB;(3) European Commission, Brussels, BELGIUM, , BE;(4) GREMARS, Universit é de Lille 3, FRANCE, , FR;(5) CORE, Université Catholique de Louvain, BELGIUM (e-mail: grilo@core.ucl.ac.be) , BE |
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Abstract: | Summary. For Bertrand duopoly with linear costs, we establish via a single (counter-)example that: (i) A new monotone transformation
of the firms' profit functions may lead to the supermodularity of transformed profits when the standard log and identity transformations
both fail to do so, and (ii) Topkis's notion of critical sufficient condition for monotonicity of a Bertrand firm's best-reply
correspondence cannot be extended to rely only on positive unit costs.
Received: January 16, 2001; revised version: March 20, 2002
RID="*"
ID="*" This work was completed while the first author was visiting the Institute for Industrial Economics at the University
of Copenhagen during Spring 2000. Their financial support and stimulating research environment are gratefully acknowledged.
The views expressed here are those of the authors and should not be attributed to the European Commission.
Correspondence to: R. Amir |
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Keywords: | and Phrases: Price competition Supermodularity Single-crossing property Critical sufficient condition |
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