Abstract
We provide a simple model of price competition in a multiproduct oligopoly market. The products are of general nature. We find that a pure strategy equilibrium exists and every equilibrium consumption maximizes the total social surplus. Consumers are characterized by a set function which determines their willingness to pay for every subset of products. If this function is convex, the set of equilibrium prices coincides with the core of a cooperative game generated by this set function and the firms extract total industry surplus. If it is concave, the only equilibrium price of a product is its marginal contribution to the consumer's total willingness to pay.Journal of Economic LiteratureClassification Numbers: C72, D21, D41, D43, L13.
| Original language | English |
|---|---|
| Pages (from-to) | 377-401 |
| Number of pages | 25 |
| Journal | Journal of Economic Theory |
| Volume | 77 |
| Issue number | 2 |
| DOIs | |
| State | Published - Dec 1997 |
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