Publication Date
2021
Journal or Book Title
JOURNAL OF PHYSICS-COMPLEXITY
Abstract
Duopolies are one of the simplest economic situations where interactions between firms determine market behavior. The standard model of a price-setting duopoly is the Bertrand model, which has the unique solution that both firms set their prices equal to their costs-a paradoxical result where both firms obtain zero profit, which is generally not observed in real market duopolies. Here we propose a new game theory model for a price-setting duopoly, which we show resolves the paradoxical behavior of the Bertrand model and provides a consistent general model for duopolies.
ORCID
Killingback, Julian/0000-0003-2280-8759
DOI
https://doi.org/10.1088/2632-072X/abed37
Volume
2
Issue
3
License
UMass Amherst Open Access Policy
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.
Recommended Citation
Killingback, Julian and Killingback, Timothy, "Evolutionary Dynamics of Bertrand Duopoly" (2021). JOURNAL OF PHYSICS-COMPLEXITY. 1364.
https://doi.org/10.1088/2632-072X/abed37