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Bertrand and Cournot competition under asymmetric costs: number of active firms in equilibrium
| Content Provider | Semantic Scholar |
|---|---|
| Author | Ledvina, Andrew Sircar, Ronnie |
| Copyright Year | 2010 |
| Abstract | We compare the number of active firms, i.e. the number of firms producing a positive quantity, in equilibrium across four different models of oligopoly: Cournot and Bertrand with homogeneous or differentiated goods. We concentrate on the linear demand structure with constant marginal but asymmetric costs. (With symmetric costs, the results trivialize to all firms active or all firms inactive.) When firms have different costs, we show that, for fixed good type, Cournot always results in more active firms than Bertrand. Moreover, with a fixed market type, differentiated goods result in more active firms than homogeneous goods. Hence, consumers pay for more choice in a Cournot market relative to Bertrand. JEL classification: C72; D43; L11; L22 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.princeton.edu/~sircar/Public/ARTICLES/asymmetricOligopoly_v9.pdf |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Bertrand (programming language) Choice Behavior Darknet market Financial cost Kind of quantity - Equilibrium Manufactured Supplies Marginal model Maximal set Physical Inactivity |
| Content Type | Text |
| Resource Type | Article |
