Tuesday, August 7, 2018
Demuynck, Thomas (universite libre de bruxelles) ; Herings, P. Jean-Jacques (General Economics 1 (Micro)) ; Saulle, Riccardo D. (General Economics 1 (Micro)) ; Seel, Christian (General Economics 1 (Micro)) theorize about Bertrand Competition with Asymmetric Costs: A Solution in Pure Strategies.
ABSTRACT: We consider two versions of a Bertrand duopoly with asymmetric costs and homogeneous goods. They differ in whether predatory pricing is allowed. For each version, we derive the Myopic Stable Set in pure strategies as introduced by Demuynck, Herings, Saulle, and Seel (2017). We contrast our prediction to the prediction of Nash Equilibrium in mixed strategies.