Bertrand duopoly

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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.
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(B) in Bertrand model, firms compete each other on basis of prices of sold products, to the effect that (Lipsey and Chrystal, 2004): a) each firm is perfectly aware the other firm, as itself, pushes its prices to a certain level, this resulting in both firms competing one another through lowering their prices below the level chosen by the other firm; b) both firms' prices equate to short-term marginal costs; c) both firms' profits will reach low levels, if any at all--in long term.
Besides Cournot model, there is another important model: the Bertrand model. The former is under the assumption that producers in an oligopoly decide their policy assuming that other producers will maintain their output at its existing level, while Bertrand model is based on the assumption that producers act on the belief that competitors will maintain their price to maximize profits rather than their output.
"A Bertrand model of pricing and entry", Economics Letters 41, 199-206.
The final results, which have shown the overall better performance of students who were taught using E-learning techniques (Herceg et al., 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.
Sharkey, William y David Sibley (1993): "A Bertrand model of pricing and entry"; Economics Letters 41, 199-206.
The Bertrand model still supports the most competitive outcome, as the rivals cannot restrict output to raise price under a simple Bertrand structure.
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.
The Bertrand model predicts that in the price-setting market, if one firm enters, it sets the monopoly price; if more than one firm enters, they all set prices equal to marginal cost.
Following the classic Bertrand model, the demand functions for the two manufacture are
The experimental literature on the asymmetric Bertrand model is thin.
Use of this relationship and (7) results in the equilibrium price and level of service in the differentiated price Bertrand model: