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INTEGER PRICING AND BERTRAND‐EDGEWORTH OLIGOPOLY WITH STRICTLY CONVEX COSTS: IS IT WORTH MORE THAN A PENNY?
Author(s) -
Dixon Huw David
Publication year - 1993
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1993.tb00570.x
Subject(s) - economics , oligopoly , bertrand competition , bertrand paradox (economics) , mathematical economics , microeconomics , regular polygon , set (abstract data type) , econometrics , mathematics , computer science , cournot competition , geometry , programming language
In this paper we analyse the implications of integer pricing for Bertrand Edgeworth oligopoly with strictly convex costs. When price is a continuous variable, there is a generic non‐existence of pure‐strategy equilibrium. In the case of integer pricing, this is not so. We characterize a set of possible single price equilibria around the competitive price, which if non‐empty will constitute the set of single price equilibria if the industry is large enough. Furthermore, we provide an example in which the highest equilibrium price can be arbitrarily far from the competitive price.