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A Dynamic Model of Bertrand Competition with Entry
Walter Elberfeld
Elmar G. Wolfstetter
出版
SSRN
, 2017
URL
http://books.google.com.hk/books?id=wVLhzwEACAAJ&hl=&source=gbs_api
註釋
This paper analyzes a simple, repeated game of simultaneous entry and pricing. We report a surprising property of the symmetric equilibrium solution: If the number of potential competitors is increased above two, the market breaks down with higher probability, and the competitive outcome becomes less likely. More potential competition lowers welfare--another Bertrand paradox. The model can also be applied to auctions to explore whether a revenue maximizing auctioneer should restrict the number of bidders if bidder participation is costly.
