Bertrand competition with cost uncertainty

We analyze the classical model of Bertrand competition in a homogeneous good market with constant marginal costs and uncertainty regarding rivals' costs. First, we show that there exists a mixed strategy Nash equilibrium under the conventional equal sharing rule. Second, we illustrate the result for the case of piecewise-affine market demand.

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Year of publication:	2010
Authors:	Routledge, Robert R.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 107.2010, 3, p. 356-359
Publisher:	Elsevier
Keywords:	Bertrand competition Cost uncertainty Mixed strategies

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008494891