Pricing Web services with different Quality of Service (QoS) classes over the Internet is a wellknown problem of paramount importance. Main works presented in literature focus on a monopolistic setting where one service provider sells one or more services of different classes to a number of customers. The Service Level Agreement (SLA) is the contract scheme most commonly used. Basically, provid...

This paper studies the effects of increasing the number of sellers on Quantal Response Equilibrium (QRE) prices in homogeneous product Bertrand oligopoly markets. We show that the two most commonly used choice functions (power and logistic) lead to qualitatively different comparative-static predictions with respect to the relationship between number of firms and prices. JEL Numbers: C73, D83, L13

It is difficult to overemphasize the contribution of Francis Ysidro Edgeworth (1845-1926) to modern economics. His general research program was indeed ambitious: the application of mathematics and statistics to economics (or, better, to the ‘moral sciences’).’ This program remains very much in the agenda of social science today. In this short paper I will concentrate on Edgeworth’s contribution...

one of the most practical routine tests for convergence of a positive series makes use of the ratio test. if this test fails, we can use rabbe's test. when rabbe's test fails the next sharper criteria which may sometimes be used is the bertrand's test. if this test fails, we can use a generalization of bertrand's test and such tests can be continued innitely. for simplicity...

We study personalized price competition with costly advertising among n quality-cost differentiated firms. Strategies involve mixing over both prices and whether to advertise. In equilibrium, only the top two firms advertise, earning “Bertrand-like” profits. Social efficiency is U-shaped in the ad cost, with losses due to excessive advertising and sales by the “wrong” firm. Quality or cost impr...

The existence of a pure-strategy subgame-perfect equilibrium in qualities and prices is investigated in a duopoly model of vertical differentiation where quality improvements require a quadratic variable cost and network externalities operate. We show that there exists a parameter region where the incentive to predate at the quality stage prevents firms from reaching a pure-strategy non-coopera...

Abstract We present preferences exhibiting a so-called subordinate good, namely commodity such that the willingness to pay for it increases when consumption of all goods proportionally, and thus receives negative price-cost margin according Ramsey pricing. also show its Bertrand equilibrium price is above Cournotian price.

In this laboratory experiment sellers simultaneously post prices and choose whether to advertise this price. Buyers then decide whether to buy from a seller whose advertisement they have received, or engage in costly sequential search to obtain price quotes from other sellers. In the unique symmetric equilibrium, sellers either charge a high unadvertised price or randomize in an interval of low...