Publication: List pricing and pure strategy outcomes in a Bertrand-Edgeworth duopoly
dc.affiliation.dpto | UC3M. Departamento de Economía | es |
dc.contributor.author | García Díaz, Antón | |
dc.contributor.author | Kujal, Praveen | |
dc.date.accessioned | 2006-11-09T11:26:46Z | |
dc.date.available | 2006-11-09T11:26:46Z | |
dc.date.issued | 2003-10 | |
dc.description.abstract | Non-existence of a pure strategy equilibrium in a Bertrand-Edgeworth duopoly model is analyzed. The standard model is modified to include a list pricing stage and a subsequent price discounting stage. Both firms first simultaneously choose a maximum list price and then decide to lower the price, or not, in a subsequent discounting stage. List pricing works as a credible commitment device that induces the pure strategy outcome. It is shown that for a general class of rationing rules there exists a sub-game perfect equilibrium that involves both firms playing pure strategies. This equilibrium payoff dominates any other sub-game perfect equilibrium of the game. Further unlike the dominant firm interpretation of a price leader, we show that the small firm may have incentives to commit to a low price and in this sense assume the role of a leader. | |
dc.format.extent | 509643 bytes | |
dc.format.mimetype | application/pdf | |
dc.identifier.issn | 2340-5031 | |
dc.identifier.repec | we034918 | |
dc.identifier.uri | https://hdl.handle.net/10016/300 | |
dc.language.iso | eng | |
dc.relation.ispartofseries | UC3M Working Paper. Economics | |
dc.relation.ispartofseries | 2003-18 | |
dc.rights.accessRights | open access | |
dc.subject.eciencia | Economía | |
dc.title | List pricing and pure strategy outcomes in a Bertrand-Edgeworth duopoly | |
dc.type | working paper | * |
dspace.entity.type | Publication |
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