Aggregation and Imperfect Competition: On the Existence of Equilibrium
Copyright policy )Aggregation and Imperfect Competition: On the Existence of Equilibrium
Summary: We present a new approach to the theory of imperfect competition and apply it to study price competition among differentiated products. The central result provides general conditions under which there exists a pure-strategy price equilibrium for any number of firms producing any set of products. This includes products with multi-dimensional attributes. In addition to the proof of existence, we provide conditions for uniqueness. Our analysis covers location models, the characteristics approach, and probabilistic choice together in a unified framework. To prove existence, we employ aggregation theorems due to \textit{A. Prékopa} [Acta Sci. Math. 32, 301-316 (1971; Zbl 0235.90044)] and \textit{C. Borell} [Period. Math. Hung. 6, 111-136 (1975; Zbl 0402.28007)]. Our companion paper [Econometrica 59, 1-23 (1991)] introduces these theorems and develops the application to super-majority voting rules.
differentiated products, super-majority voting rules, Imperfect competition, Bertrand equilibrium, differentiated products, prices, price competition, pure- strategy price equilibrium, General equilibrium theory, imperfect competition, Microeconomic theory (price theory and economic markets), price competition, location models
differentiated products, super-majority voting rules, Imperfect competition, Bertrand equilibrium, differentiated products, prices, price competition, pure- strategy price equilibrium, General equilibrium theory, imperfect competition, Microeconomic theory (price theory and economic markets), price competition, location models
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