Equilibrium existence with spillover demand

C-Tier
Journal: Economics Letters
Year: 2021
Volume: 208
Issue: C

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

Non-existence of a pure-strategy Nash equilibrium is a persistent problem in oligopoly models where sellers compete in prices and quantities. At the heart of this problem are unserved customers who are still willing to visit a less preferred supplier (i.e., so-called spillover demand). This note develops a consumer behavior model with spillover demand. Within this model there is a class of demand specifications for which a pure-strategy Nash equilibrium exists. This price-quantity equilibrium is shown to coincide with the Bertrand price equilibrium.

Technical Details

RePEc Handle
repec:eee:ecolet:v:208:y:2021:i:c:s0165176521003384
Journal Field
General
Author Count
2
Added to Database
2026-01-24