Abstract
In this paper we provide an explicit mixed strategy equilibrium solution for an oligopoly game. In the specification of the model, we assume that each firm has to make a decision on the production level while it names its prices, and we introduce a fixed unit cost for unsold inventory. Hence, both price and quantity appear as strategic variables.
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References
Bertrand, J.: Theorie mathematique de la richesse sociale. (review) Journal des Savants (Paris: September 1883), 499–508.
Levitan, R.E., andM. Shubik: Price Duopoly and Capacity Constraints. Cowles Foundation Discussion Paper No. 287, February 10, 1970.
-: Duopoly with Price and Quantity as Strategic Variables. Cowles Foundation Discussion Paper 289, July 17, 1970 (Revised 1978).
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Levitan, R., Shubik, M. Duopoly with price and quantity as strategic variables. Int J Game Theory 7, 1–11 (1978). https://doi.org/10.1007/BF01763115
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DOI: https://doi.org/10.1007/BF01763115