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Bertrand Competition (bertrand + competition)
Selected AbstractsBERTRAND COMPETITION CAN YIELD HIGHER PRICES THAN MONOPOLYBULLETIN OF ECONOMIC RESEARCH, Issue 3 2007Helge Sanner D42; L11; R32 ABSTRACT If we take into account the spatial dimension of markets, prices of incumbent firms may be higher and consumer surplus may be lower with competition than with monopoly. This result obtains unambiguously, even in the supposedly highly competitive case of Bertrand competition. Moreover, we are able to show that consumers of the commodity may be worse off with duopoly, if the distance between the firms' sites is sufficiently large. [source] Pricing Access to a Monopoly InputJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2004David S. Sibley What price should downstream entrants pay a vertically integrated incumbent monopoly for use of its assets? Courts, legislators, and regulators have at times mandated that incumbent monopolies lease assets required for the production of a retail service to entrants in efforts to increase the competitiveness of retail markets. This paper compares two rules for pricing such monopoly inputs: marginal cost pricing (MCP) and generalized efficient component pricing rule (GECPR). The GECPR is not a fixed price, but is a rule that determines the input price to be paid by the entrant from the entrant's retail price. Comparing the retail market equilibrium under MCP and GECPR, the GECPR leads to lower equilibrium retail prices. If the incumbent is less efficient than the entrant, the GECPR also leads to lower production costs than does the MCP rule. If the incumbent is more efficient than the entrant, however, conditions may exist in which MCP leads to lower production costs than does the GECPR. The analysis is carried out assuming either Bertrand competition, quantity competition, or monopolistic competition between the incumbent and entrant in the downstream market. [source] Lobby Groups and the Financial Support of Election CampaignsJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 3 2000M. Socorro Puy We study a model of competition between two political parties with policy compromise. There is a special interest group with well-defined preferences on political issues. Voters are of two kinds: impressionable and knowledgeable. The impressionable voters are influenced by the election campaigns. The objective of the parties is to obtain the maximum votes. Parties compete for financial support from a given interest group. Each party proposes a platform in exchange for an amount of campaign funds, and the interest group decides whether to accept or reject each of these proposals. We show that parties' competition resembles, to a certain extent, Bertrand competition. Furthermore, in equilibrium only one party gets funds from the interest group. This result differs from the one obtained in a similar model by Grossman and Helpman in which, in equilibrium, both parties are financed by the interest group. This difference arises because Grossman and Helpman assume that it is the interest group who makes the proposals to the political parties. [source] Strategic behavior in a service industryMANAGERIAL AND DECISION ECONOMICS, Issue 2 2002Pekka Ilmakunnas A model of service duopoly is formulated, where the arrival of customers and their service time in the firm are stochastic. The firms first choose the service capacity, and given the capacity they then choose the price in a Bertrand competition. Capacity choices have a negative externality on the competitor, since increased capacity in one firm decreases its expected full price (price plus cost of waiting) and leads to a flow of customers from the other firm. If the firms choose capacities strategically, it is optimal to underinvest compared to the non-strategic case, but this result may arise in different ways. By underinvesting the firms commit themselves to longer queues (lower quality) to relax price competition. Copyright © 2002 John Wiley & Sons, Ltd. [source] COMPETITION AND WELFARE: THE IMPLICATIONS OF LICENSING,THE MANCHESTER SCHOOL, Issue 1 2010ARIJIT MUKHERJEE If firms with asymmetric costs can engage in technology licensing, we show that welfare may be higher under Cournot competition than under Bertrand competition. Under fixed-fee licensing, consumer surplus and welfare are higher under Cournot competition if the technological difference between the firms is moderate. Under royalty licensing, if the bargaining power of the licenser is not very high and the technological difference between the firms is large, consumer surplus and welfare are higher under Cournot competition. We also show that technology licensing has important implications on the profit differential between Bertrand and Cournot competition. [source] Divisionalisation and Cournot Competition Yield Bertrand OutcomesAUSTRALIAN ECONOMIC PAPERS, Issue 1 2001Lasheng Yuan Bertrand and Cournot model are the main frameworks in the analysis of oligopolistic competition. The outcomes from them are however different. Using a simultaneous-move two-stage game, this article shows that, in a homogeneous product market with fairly general demand, the Bertrand outcomes can be achieved by a combination of divisionalisation and ensuing Cournot competition. This finding can be viewed as an extension to or complements of Kreps and Scheinkman (1983), who show that Cournot outcomes can be achieved by quantity precommitment and Bertrand competition. [source] BERTRAND COMPETITION CAN YIELD HIGHER PRICES THAN MONOPOLYBULLETIN OF ECONOMIC RESEARCH, Issue 3 2007Helge Sanner D42; L11; R32 ABSTRACT If we take into account the spatial dimension of markets, prices of incumbent firms may be higher and consumer surplus may be lower with competition than with monopoly. This result obtains unambiguously, even in the supposedly highly competitive case of Bertrand competition. Moreover, we are able to show that consumers of the commodity may be worse off with duopoly, if the distance between the firms' sites is sufficiently large. [source] | ||||||||||