Undercut-Proof Equilibria with Multiple Firms
16 Pages Posted: 1 Dec 2013 Last revised: 27 Mar 2015
Date Written: March 26, 2015
Abstract
This short article provides formulae for computing the undercut-proof equilibrium prices in a differentiated products industry with any finite number of firms. The formulae are very simple and can be easily implemented with a typical spreadsheet to solve for the unique equilibrium prices.
Keywords: Undercut-Proof Equilibrium, Differentiated Products, Multiple firms, Conjectural Variations
JEL Classification: L1, D43
Suggested Citation: Suggested Citation
Morgan, Peter B. and Shy, Oz, Undercut-Proof Equilibria with Multiple Firms (March 26, 2015). Available at SSRN: https://ssrn.com/abstract=2361678 or http://dx.doi.org/10.2139/ssrn.2361678
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