Second-mover advantage and price leadership in Bertrand duopoly

• 成果类型: Article
• 署名作者: Amir, R; Stepanova, A
• 署名单位: University of Arizona; University of Southern Denmark; University of Exeter
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2005.03.004
• 发表日期: 2006
• 页码: 1-20
• 关键词: Price competition; endogenous timing; First/second-mover advantage; Risk dominance

摘要

We consider the issue of first- versus second-mover advantage in differentiated-product Bertrand duopoly with general demand and asymmetric linear costs. We generalize existing results for all possible combinations where prices are either strategic substitutes and/or complements, dispensing with common extraneous and restrictive assumptions. We show that a firm with a sufficiently large cost lead over its rival has a first-mover advantage. For the linear version of the model, we invoke a natural endogenous timing scheme coupled with equilibrium selection according to risk dominance. The analysis yields, as the unique equilibrium outcome, sequential play with the low-cost firm as leader. (c) 2005 Elsevier Inc. All rights reserved.