Bayesian price leadership

• Tipo: Capítulo ou Parte de Livro
• Data: 2007

Autores

Fernanda A. Ferreira (Autor) Outra; Flávio Ferreira (Autor) Outra; Alberto A. Pinto (Autor) FCUP

Livro

Título: Mathematical Methods in Engineering. Springer.

Páginas: 371-379

Classificação Científica

FOS: Ciências exactas e naturais > Matemática

Outras Informações

Resumo (PT): In this paper, we consider a linear price setting duopoly competition with differentiated goods and with unknown costs. The firms’ aims are to choose the prices of their products according to the well-known concept of perfect Bayesian Nash equilibrium. There is a firm (F 1) that chooses first the price p 1 of its good; the other firm (F 2) observes p 1 and then chooses the price p 2 of its good. We suppose that each firm has two different technologies, and uses one of them following a probability distribution. The utilization of one or the other technology affects the unitary production cost. We show that there is exactly one perfect Bayesian Nash equilibrium for this game. We analyze the advantages, for firms and for consumers, of using the technology with highest production cost versus the one with cheapest production cost.

Abstract (EN): In this paper, we consider a linear price setting duopoly competition with differentiated goods and with unknown costs. The firms’ aims are to choose the prices of their products according to the well-known concept of perfect Bayesian Nash equilibrium. There is a firm (F 1) that chooses first the price p 1 of its good; the other firm (F 2) observes p 1 and then chooses the price p 2 of its good. We suppose that each firm has two different technologies, and uses one of them following a probability distribution. The utilization of one or the other technology affects the unitary production cost. We show that there is exactly one perfect Bayesian Nash equilibrium for this game. We analyze the advantages, for firms and for consumers, of using the technology with highest production cost versus the one with cheapest production cost.

Idioma: Inglês

Tipo (Avaliação Docente): Científica