Bertrand and Price-Taking Equilibria in Markets with Product Differentiation

In this paper we show that a homogeneous-product market with multiple Bertrand equilibria becomes a market with a single Bertrand equilibrium when we introduce a small degree of product differentiation. When differentiation tends to zero, that Bertrand equilibrium converges to the unique price-taking equilibrium of the homogeneous-product market, which is in turn one of the multiple Bertrand equilibria for that market.

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Year of publication:	2008-02
Authors:	Coloma, Germán
Institutions:	Universidad del CEMA
Subject:	Bertrand equilibrium \| price-taking equilibrium \| product differentiation

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Extent:	application/pdf
Series:	CEMA Working Papers: Serie Documentos de Trabajo.. - ISSN 1668-4583.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 369 10 pages
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005668602