Mixed Bertrand equilibria under decreasing returns to scale: An embarrassment of riches

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Abstract

We show that under decreasing returns to scale there are continua of non-zero profit mixed Bertrand equilibria where firms randomise between any finite number of pure equilibrium prices. Unlike the previous literature we do not assume infinite monopoly profit.

Original languageEnglish
Pages (from-to)359-362
Number of pages4
JournalEconomics Letters
Volume74
Issue number3
DOIs
Publication statusPublished - Feb 2002

Keywords

  • Bertrand oligopoly
  • Decreasing returns
  • Mixed equilibria

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