Quality Uncertainty as Resolution of the Bertrand Paradox

WSU School of Economic Sciences Working Paper No. 2010-1

6 Pages Posted: 28 Jan 2010

See all articles by Attila Tasnadi

Attila Tasnadi

Corvinus University of Budapest

Trenton G. Smith

University of California, Los Angeles; University of Otago

Andrew Hanks

Cornell University - Charles H. Dyson School of Applied Economics and Management

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

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

Attila Tasnadi

Corvinus University of Budapest ( email )

Fovam ter 8
Budapest, H-1093
Hungary

HOME PAGE: http://www.uni-corvinus.hu/~tasnadi

Trenton G. Smith (Contact Author)

University of Otago ( email )

PO Box 56
Dunedin
New Zealand

HOME PAGE: http://www.business.otago.ac.nz/econ/staff/smith.html

University of California, Los Angeles

Los Angeles, CA
310-825-0517 (Phone)

HOME PAGE: http://www.international.ucla.edu/globalfellows/smith/

Andrew Hanks

Cornell University - Charles H. Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
52
Abstract Views
904
Rank
687,410
PlumX Metrics