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Bertrand Competition with Asymmetric Costs: A Solution in Pure Strategies

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Working paper
Author/s: 
Thomas Demuynck, P. Jean-Jacques Herings, Riccardo Saulle, Christian Seel
Issue number: 
RM/18/002
Publisher: 
Maastricht University School of Business and Economics
Year: 
2018
We consider two versions of a Bertrand duopoly with asymmetric costs and homogeneous goods. They differ in whether predatory pricing is allowed. For each version, we derive the Myopic Stable Set in pure strategies as introduced by Demuynck, Herings, Saulle, and Seel (2017). We contrast our prediction to the prediction of Nash Equilibrium in mixed strategies.
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