Mixed Bertrand equilibria under decreasing returns to scale: an embarrassment of riches

Mixed Bertrand equilibria under decreasing returns to scale: an embarrassment of riches

We show that under decreasing returns to scale there are continua of non-zero profit mixed Bertrand equilibria where firms randomise between any finite number of pure equilibrium prices. Unlike the previous literature we do not assume infinite monopoly profits.

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Veröffentlicht in:Economics letters 2002-02, Vol.74 (3), p.359-362
1. Verfasser: Hoernig, Steffen H.
Format: Artikel
Sprache:eng
Schlagworte:
Bertrand oligopoly
Competition
Decreasing returns
Economic equilibrium
Economics
Mixed equilibria
Oligopoly
Returns to scale
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Beschreibung
Zusammenfassung:We show that under decreasing returns to scale there are continua of non-zero profit mixed Bertrand equilibria where firms randomise between any finite number of pure equilibrium prices. Unlike the previous literature we do not assume infinite monopoly profits.
ISSN:0165-1765
1873-7374
DOI:10.1016/S0165-1765(01)00564-X