Price Equilibria in Pure Strategies for Homogeneous Oligopoly |
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Authors: | Beth Allen Jacques-François Thisse |
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Institution: | Department of Economics University of Pennsylvania 3718 Locust Walk Philadelphia, PA 19104–6297;CORE, 34 voie du Roman Pays, 1348 Louvain-la-Neuve, BELGIUM and University of Paris I-Sorbonne 12 Place du Pantheon 75231 Paris. Cedex 05 FRANCE |
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Abstract: | For a homogeneous product oligopoly market, possibilities for pure strategy Nash equilibria in prices are studied. Consumers, who each nonstrategically purchase one unit up to a common reservation price, are hypothesized to be more concerned with large price differences (and therefore buy from the cheapest firm) than slightly different prices. For the duopoly case, existence, uniqueness, and characterization results are provided. Linear examples are given with 2 and n firms. |
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