Comparing Cournot and Bertrand equilibria revisited
نویسنده
چکیده
Comparing Cournot and Bertrand Equilibria Revisited by Jim Y. Jin This paper compares Cournot and Bertrand equilibria with mixed products, linear demand and cost functions. It is found that a firm's price (output) need not be higher (lower) in Cournot equilibrium. However, given any number of firms and a mixture of complement and substitute products, every firm's price margin/output ratio is always higher in Cournot equilibrium, and the weighted squared outputs (price margins) are higher (lower) in Bertrand equilibrium. When price (quantity) competition is a supermodular game, consumer surplus (social welfare) is higher in price competition. Nevertheless, price competition results in more market concentration measured by Herfindahl index.
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