Journal ArticleDOI
Bertrand-edgeworth oligopoly in large markets
Beth E Allen,Martin Hellwig +1 more
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In this paper, the relation between perfectly competitive and monopolistically competitive equilibria is analyzed for a single market in which capacity constrained firms choose prices as strategies. And the authors provide a justification for perfect competition that is based on an explicit account of price formation.Abstract:
The relation between perfectly competitive and monopolistically competitive equilibria is analysed for a Bertrand-Edgeworth model of a single market in which capacity constrained firms choose prices as strategies. The market always has a Nash equilibrium in pure or mixed strategies. As the number of firms increases, the corresponding equilibria converge in distribution to a perfectly competitive price. This result provides a justification for perfect competition that is based on an explicit account of price formation. However, monopoly prices persist with a positive but vanishing probability. Regularity or well defined inverse demand functions are not required.read more
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Journal ArticleDOI
Competition, Adverse Selection, and Information Dispersion in the Banking Industry
TL;DR: In this paper, the authors draw implications for whether financial deregulation is likely to increase borrowers' surplus and what patterns of entry might be observed, and draw a conclusion that entry should be easier in markets with high borrower turnover or where entrants have specific expertise in evaluating credit risks.
Journal ArticleDOI
Equilibrium price dispersion under demand uncertainty: the roles of costly capacity and market structure
TL;DR: In this paper, the authors show that the optimal price strategy of a monopolist and the unique pure-strategy Nash equilibria of oligopolists both exhibit intra-firm price dispersion.
ReportDOI
Markov perfect industry dynamics with many firms
TL;DR: In this article, a simple algorithm for computing an oblivious equilibrium, in which each firm is assumed to make decisions based only on its own state and knowledge of the long run average industry state, but where firms ignore current information about competitors' states.
Journal ArticleDOI
Price competition in a capacity-constrained duopoly
TL;DR: In this article, the set of Nash equilibria in a model of price-setting duopoly in which each firm has limited capacity, and demand is continuous and decreasing, is characterized.
Journal ArticleDOI
Competing Premarital Investments
Michael Peters,Aloysius Siow +1 more
TL;DR: The authors studies premarital parental investments in children's wealth, where spousal wealth is a public good in marriage and parents increase the wealth of their children and the quality of the spouses that their children can marry.
References
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Book
Convergence of Probability Measures
TL;DR: Weak Convergence in Metric Spaces as discussed by the authors is one of the most common modes of convergence in metric spaces, and it can be seen as a form of weak convergence in metric space.
Book
Probability and Measure
TL;DR: In this paper, the convergence of distributions is considered in the context of conditional probability, i.e., random variables and expected values, and the probability of a given distribution converging to a certain value.
Book ChapterDOI
Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes
TL;DR: In this article, the authors consider a two-stage oligopoly game where, first, there is simultaneous production, and second, after production levels are made public, there was price competition.
Journal ArticleDOI
The Existence of Equilibrium in Discontinuous Economic Games, I: Theory
Eric Maskin,Partha Dasgupta +1 more
TL;DR: In this article, the existence of Nash equilibrium in games where agents' payoff functions are discontinuous is investigated, and it is shown that the payoff functions in mildly modified versions of these constructs exhibit two weaker forms of continuity which, together with the requirement of quasi-concavity, suffice for the presence of an equilibrium.
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