Bertrand competition with non-rigid capacity constraints

We examine a model of Bertrand competition with non-rigid capacity constraints, so that by incurring an additional per unit cost of capacity expansion, firms can produce beyond capacity. We find that there is an interval of prices such that a price can be sustained as a pure strategy Nash equilibrium if and only if it lies in this interval. We then examine the properties of this set as [a] the number of firms becomes large and [b] the capacity cost increases.

MoreLess

Year of publication:	2009-01
Authors:	Chowdhury, Prabal Roy
Institutions:	Indian Statistical Institute
Subject:	Bertrand competition \| capacity constraint

More details

Extent:	application/pdf
Series:	Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	13 pages
Classification:	D4 - Market Structure and Pricing ; L1 - Market Structure, Firm Strategy, and Market Performance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008590964