2008), suggest that the hypothesis should not be rejected: it was shown that 82% of students who were taught the Bertrand model
using e-learning techniques got full 5 points, while only 55% of the non-e-learning students had the same score.
Bertrand model of Hegji and Moore resulting in service levels, and ultimately prices, that are inefficiently high from a social point of view.
As with the monopoly and Bertrand models discussed in Hegji and Moore, price in the Cournot duopoly is a markup above production and service costs.
In a Bertrand model
, firms set prices, let the market set the quantities, and again ignore responses.
The Bertrand model also includes two different pricing schemes: one for an ISP with traditional unlimited access, flat rate pricing for BE, and another for an ISP with a two-part tariff consisting of a fixed rate for BE, plus a usage-sensitive pricing strategy for QoS.
We therefore believe that a Bertrand model better suits our approach.
Edgeworth modified the original Bertrand model
to introduce the possibility of limited capacity.
This characteristic of the differentiated price Bertrand model is well known, its source being evident in the Bertrand reaction function.
Comparing equations (5) and (8) reveals that the equilibrium level of service in the Bertrand model is greater than in the non-strategic case.
Consumers gain from the competition in the differentiated price Bertrand model due to greater service, but lose due to higher prices compared to the non-strategic case.
This suggests that a modified form of kinked demand curve model may be more appropriate for modeling small business than typical Bertrand models
, since Bertrand conjectures are symmetric with respect to increases or decreases in price.