The authors would like to thank Klaus Zauner and two anonymous referees for helpful comments on an earlier version of the paper.
ENDOGENOUS TIMING AND STRATEGIC CHOICE: THE COURNOT-BERTRAND MODEL
Article first published online: 9 DEC 2011
© 2011 The Authors. Bulletin of Economic Research © 2011 John Wiley & Sons Ltd and the Board of Trustees of the Bulletin of Economic Research
Bulletin of Economic Research
Volume 65, Issue 4, pages 332–342, October 2013
How to Cite
Tremblay, V. J., Tremblay, C. H. and Isariyawongse, K. (2013), ENDOGENOUS TIMING AND STRATEGIC CHOICE: THE COURNOT-BERTRAND MODEL. Bulletin of Economic Research, 65: 332–342. doi: 10.1111/j.1467-8586.2011.00411.x
- Issue published online: 9 SEP 2013
- Article first published online: 9 DEC 2011
- Bertrand model;
- Cournot model;
- mixed output-price competition;
- Stackelberg model;
Cournot establishes a Nash equilibrium to a duopoly game under output competition; Bertrand finds a different Nash equilibrium under price competition. Both treat the strategic choice variable (output versus price) and the timing of play as exogenous. We investigate Cournot-Bertrand models where one firm competes in output and the other competes in price in both static and dynamic settings. We also develop a general model where both the timing of play and the strategic choice variables are endogenous. Consistent with the conduct of Honda and Scion, we show that Cournot-Bertrand behaviour can be a Nash equilibrium outcome.