von Stackelberg’s equilibria for Bertrand‐Edgeworth duopoly with buyouts

Patrick Van Cayseele (Center of Economic Studies, K.U. Leuven, Belgium and)
Dave Furth (University of Amsterdam, The Netherlands)

Journal of Economic Studies

ISSN: 0144-3585

Publication date: 1 December 1996

Abstract

Solves von Stackelberg equilibria in a Bertrand‐Edgeworth duopoly game. Shows that, initially, the environment is characterized by efficient rationing and capacity constraints. Since interest lies in sustaining monopoly outcomes from non‐co‐operative behaviour, introduces the buyout option, where rivals can absorb one another’s output before any consumer. Reveals that the outcomes change drastically in that players together are able to reach the monopoly profits.

Keywords

Citation

Van Cayseele, P. and Furth, D. (1996), "von Stackelberg’s equilibria for Bertrand‐Edgeworth duopoly with buyouts", Journal of Economic Studies, Vol. 23 No. 5/6, pp. 96-109. https://doi.org/10.1108/01443589610154081

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Publisher

:

MCB UP Ltd

Copyright © 1996, MCB UP Limited

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