Quality Uncertainty as Resolution of the Bertrand Paradox
WSU School of Economic Sciences Working Paper No. 2010-1
6 Pages Posted: 28 Jan 2010
Date Written: January 22, 2010
Abstract
We show that in a homogeneous-good duopoly market with quality uncertainty and constant unit costs, the Bertrand paradox (i.e., marginal cost pricing) can be avoided.
Keywords: oligopoly, endogenous preferences, threshold utility
JEL Classification: L13, D81
Suggested Citation: Suggested Citation
Tasnadi, Attila and Smith, Trenton G. and Smith, Trenton G. and Hanks, Andrew, Quality Uncertainty as Resolution of the Bertrand Paradox (January 22, 2010). WSU School of Economic Sciences Working Paper No. 2010-1, Available at SSRN: https://ssrn.com/abstract=1543948 or http://dx.doi.org/10.2139/ssrn.1543948
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