| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP8817
|
| DP8817 Does Cost Uncertainty in the Bertrand Model Soften Competition? |
| Johan Lagerlof
|
| 发表日期 | 2012-02-01
|
| 出版年 | 2012
|
| 语种 | 英语
|
| 摘要 | Although naive intuition may indicate the opposite, the existing literature suggests that uncertainty about costs in the homogeneous-good Bertrand model intensifies competition: it lowers price and raises total surplus (but also makes profits go up). Those results, however, are derived under two assumptions that, if relaxed, conceivably could reverse the results. The present paper first shows that the results hold also if drastic innovations are possible. Next, the paper assumes asymmetric cost distributions, a possibility that is empirically highly plausible but which has been neglected in the previous literature. Using numerical methods it is shown that, under this assumption, uncertainty lowers price and raises total surplus even more than with identical distributions. However, if the asymmetry is large enough, industry profits are lower under uncertainty; this is in contrast to the known results and reinforces the notion that uncertainty intensifies competition rather than softens it. |
| 主题 | Industrial Organization
|
| 关键词 | Oligopoly
Bertrand competition
Hansen-spulber model
Auctions with endogenous quantity
Private information
Information sharing
Asymmetric firms
Asymmetric auctions
Boundary value method
|
| URL | https://cepr.org/publications/dp8817
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/537653
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推荐引用方式
GB/T 7714 |
Johan Lagerlof. DP8817 Does Cost Uncertainty in the Bertrand Model Soften Competition?. 2012.
|
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