Abstract
This chapter helps us apply many of the concepts of previous chapters, dealing with simultaneous- and sequential-move games under complete information, to common industrial organization problems. In particular, we start with a systematic search for pure and mixed strategy equilibria in the Bertrand game of price competition between two symmetric firms, where we use several figures to illustrate our discussion. We then extend our explanation to settings in which firms are allowed to exhibit different costs.
The original version of the chapter was revised: The erratum to the chapter is available at: 10.1007/978-3-319-32963-5_11
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Notes
- 1.
For more details on this MSNE, see Andreas Blume (2003) “Bertrand without fudge” Economic Letters, 7, pp. 167–68.
- 2.
Singh, N., & Vives, X. (1984). “Price and Quantity Competition in a Differentiated Duopoly”. The Rand Journal of Economics, 15, 4, 546–554.
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Munoz-Garcia, F., Toro-Gonzalez, D. (2016). Applications to Industrial Organization. In: Strategy and Game Theory. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-32963-5_5
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DOI: https://doi.org/10.1007/978-3-319-32963-5_5
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