Bertrand competition and captive customers

C-Tier
Journal: Economics Letters
Year: 2025
Volume: 257
Issue: C

Authors (2)

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study a Bertrand oligopoly with asymmetric costs in which each seller has some “captive” buyers. In the limit as captive buyers vanish, the lowest-cost firm sells to all buyers at a price equal to the second-lowest marginal cost. However, the closest competing price arises from non-degenerate mixed strategies, firms play exclusively undominated strategies, and with positive probability all but one firm sets the monopoly price.

Technical Details

RePEc Handle
repec:eee:ecolet:v:257:y:2025:i:c:s0165176525005476
Journal Field
General
Author Count
2
Added to Database
2026-01-29