On price equilibrium with multi-product firms

Alexander Konovalov*, Zsolt Sandor

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

8 Citations (Scopus)

Abstract

In this paper, we provide a result that shows existence and uniqueness of Nash equilibrium in cases in which existing methods are problematic. This result is based on a theorem by Kellogg (Proc Am Math Soc 60:207-210, 1976) that provides conditions for the existence of a unique fixed point. We apply it to the simple logit discrete choice model and the CES representative consumer model, where asymmetric cost firms produce multiple vertically and horizontally differentiated products and compete in prices.

Original languageEnglish
Pages (from-to)271-292
Number of pages22
JournalEconomic Theory
Volume44
Issue number2
DOIs
Publication statusPublished - Aug-2010

Keywords

  • Nash-Bertrand
  • Price competition
  • Product differentiation
  • Logit
  • CES
  • MONOPOLISTIC COMPETITION
  • PRODUCT DIFFERENTIATION
  • AGGREGATION
  • EXISTENCE
  • DEMAND
  • MODELS

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