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- Title
A price competition game under free entry.
- Authors
Yano, Makoto
- Abstract
This study builds a game of Bertrand-like price competition in a market with free entry. Under the assumption of a standard U-shaped average cost curve, it demonstrates that even if the number of sellers is small, a long-run competitive outcome can be supported as a Nash equilibrium. This game provides unifying treatments to the standard Bertrand equilibrium, the long-run competitive outcome, Demsetz’s equilibrium as well as other types of equilibria that have not been known in the existing literature.
- Subjects
PRICE levels; INDUSTRIAL costs; PRICE maintenance; PRICES; ECONOMIC competition; COST accounting; ECONOMIC research
- Publication
Economic Theory, 2006, Vol 29, Issue 2, p395
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-005-0028-8