Tasnádi, Attila (2012) Endogenous Timing of Moves in Bertrand-Edgeworth Triopolies. Working Paper. MTA-BCE "Lendület" Strategic Interactions Research Group. (Unpublished)
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Abstract
We determine the endogenous order of moves in which the firms set their prices in the framework of a capacity-constrained Bertrand-Edgeworth triopoly. A three-period timing game that determines the period in which the firms announce their prices precedes the price-setting stage. We show for the non-trivial case (in which the Bertrand-Edgeworth triopoly has only an equilibrium in non-degenerated mixed-strategies) that the firm with the largest capacity sets its price first, while the two other firms set their prices later. Our result extends a finding by Deneckere and Kovenock (1992) from duopolies to triopolies. This extension was made possible by Hirata's (2009) recent advancements on the mixed-strategy equilibria of Bertrand-Edgeworth games.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Uncontrolled Keywords: | Bertrand-Edgeworth, price leadership, oligopoly, timing games |
| JEL classification: | D43 - Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection L13 - Oligopoly and Other Imperfect Markets |
| Divisions: | Faculty of Economics > Department of Mathematics |
| Subjects: | Economics |
| Funders: | Hungarian Scientific Research Fund (OTKA K-101224) |
| Projects: | MTA-BCE "Lendület" Strategic Interactions Research Group |
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| ID Code: | 1269 |
| Deposited By: | Attila Tasnádi |
| Deposited On: | 21 Jun 2013 11:10 |
| Last Modified: | 14 Apr 2015 11:18 |
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