Price competition in the Hotelling model with uncertainty on costs

• Tipo: Artigo em Revista Científica Internacional
• Data: 2015

Autores

Alberto A. Pinto (Autor) FCUP; Telmo Parreira (Autor) Outra

Revista

Título: Optimization

Vol. 64 Nº 11

Páginas: 2477-2493

ISSN: 0233-1934

Editora: Taylor & Francis

Indexação

ISI Web of Knowledge - 9 Citações

Scopus - 11 Citações

Classificação Científica

FOS: Ciências exactas e naturais > Matemática

Outras Informações

ID Authenticus: P-00G-M2M

DOI: 10.1080/02331934.2014.917304

Abstract (EN): For the linear Hotelling model with firms located at the boundaries of the segment line, we study the price competition in a scenario of incomplete information in the production costs of both firms. We introduce the bounded uncertain costs (BUC) condition in the production costs and we prove that there is a local optimum price strategy if and only if the BUC condition holds. We compute explicitly the local optimum price strategy and we prove that it does not depend upon the distributions of the production costs of the firms, except on their first moments. We prove that the ex-post profit of a firm is smaller than its ex-ante profit if and only if the production cost of the other firm is greater than its expected cost.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 17