Bertrand duopoly

(redirected from Bertrand competition)
Also found in: Wikipedia.

Bertrand Duopoly

One of two major models of how duopolies operate. In the Bertrand model, two companies compete with each other for the lowest possible price, resulting in perfect competition. Bertrand duopoly is applicable in many circumstances but it does not express duopolistic behavior perfectly. See also: Cournot model.

Bertrand duopoly

see DUOPOLY.
Mentioned in ?
References in periodicals archive ?
In doing so, we consider the same model setup as above except for two things: (i) a variety of goods is being sold on the platform, with the costs c differing widely across goods; and (ii) for each good c, there are multiple sellers who engage in Bertrand competition, so sellers have no market power.
(2) On the other hand, a number of authors (Braid 1986, 1999; Deneckere and Davidson 1985; Levy and Reitzes 1992; Reitzes and Levy 1990) have shown that a merger raises prices and is more profitable for the merging firms when firms produce differentiated products and compete in prices (i.e., under Bertrand competition).
We find that the Bertrand competition can be more profitable than the Cournot one when users have a distinct preference for application variety.
The study also found that the certification agency will set an optimality criterion with environmental corporate social responsibility certification; standards of corporate social responsibility in Cournot competition are equal to the standards of corporate social responsibility in the Bertrand competition. However, compared with Cournot competition, Bertrand competition has more benefits for companies and adopting ECSR certification is beneficial for both companies and consumers.
Isariyawongse, "Cournot and Bertrand competition when advertising rotates demand: the case of Honda and Scion," International Journal of the Economics of Business, vol.
One strategy is price competition which is often defined as Bertrand competition in economics literature.
THE OPTIMAL NUMBER OF FIRMS UNDER BERTRAND COMPETITION
This is known as Bertrand competition. Under quantity competition, firms take prices of their rivals as given and choose their own quantities; this is known as Cournot competition.
For some time now, prominent antitrust economists have advocated models of differentiated Bertrand competition, which appear to imply that merger of a subset of competitors necessarily raises price, or have made general statements that differentiated Bertrand competition implies that merger of a subset of competitors always raises price.
Quantity competition and price competition trip off the tongue just as easily as Cournot competition and Bertrand competition. Further, just because a current usage is firmly entrenched, resisting the required change in nomenclature would be an unseemly surrender to the status quo.
Blume (2003) examines Bertrand competition with continuous strategy space, homogenous products, and different marginal costs and shows that for small enough [eta] > 0, the following is an equilibrium: The low-cost firm posts a price equal to [c.sub.2], and the high-cost firm randomizes uniformly over [[c.sub.2], [c.sub.2] + [eta]], Blume argues that from a continuum of equilibria, the case in which the low-cost firm sets a price equal to [c.sub.2] represents the only equilibrium in undominated strategies.
Further we introduce the price adjustment (i.e., Bertrand competition) in addition to the quantity adjustment (i.e., Cournot competition) to investigate the effects caused by the choice of operational strategies and then address dynamics in the continuous-time scales.