TY - JOUR
T1 - A model of multiproduct price competition
AU - Tauman, Yair
AU - Urbano, Amparo
AU - Watanabe, Junichi
N1 - Funding Information:
We provide a simple model of price competition in a multiproduct oligopoly market. The products are of general nature. We find that a pure strategy equilibrium exists and every equilibrium consumption maximizes the total social surplus. Consumers are characterized by a set function which determines their willingness to pay for every subset of products. If this function is convex, the set of equilibrium prices coincides with the core of a cooperative game generated by this set function and the firms extract total industry surplus. If it is concave, the only equilibrium price of a product is its marginal contribution to the consumer’s total willingness to pay. Journal of Economic Literature Classification Numbers: C72, D21, D41, D43, L13. 1997 Academic Press * A preliminary version of this paper was presented at the Second Summer Meeting on ‘‘Implementation and Issues in Game Theory,’’ held in Valencia, June 22 24, 1994. We thank participants for helpful comments. We also thank David Schmeidler, Yan Chen, and especially Chun-Hsiung Liao for very helpful remarks. This research has been partially supported by D.G.I.C.Y.T. under Project PB93-0684. A previous draft of this paper appears as a working paper (1996) at the ‘‘Instituto Valenciano de Investigaciones Economicas’’ (I.V.I.E.).
PY - 1997/12
Y1 - 1997/12
N2 - We provide a simple model of price competition in a multiproduct oligopoly market. The products are of general nature. We find that a pure strategy equilibrium exists and every equilibrium consumption maximizes the total social surplus. Consumers are characterized by a set function which determines their willingness to pay for every subset of products. If this function is convex, the set of equilibrium prices coincides with the core of a cooperative game generated by this set function and the firms extract total industry surplus. If it is concave, the only equilibrium price of a product is its marginal contribution to the consumer's total willingness to pay.Journal of Economic LiteratureClassification Numbers: C72, D21, D41, D43, L13.
AB - We provide a simple model of price competition in a multiproduct oligopoly market. The products are of general nature. We find that a pure strategy equilibrium exists and every equilibrium consumption maximizes the total social surplus. Consumers are characterized by a set function which determines their willingness to pay for every subset of products. If this function is convex, the set of equilibrium prices coincides with the core of a cooperative game generated by this set function and the firms extract total industry surplus. If it is concave, the only equilibrium price of a product is its marginal contribution to the consumer's total willingness to pay.Journal of Economic LiteratureClassification Numbers: C72, D21, D41, D43, L13.
UR - http://www.scopus.com/inward/record.url?scp=0031539392&partnerID=8YFLogxK
U2 - 10.1006/jeth.1997.2331
DO - 10.1006/jeth.1997.2331
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AN - SCOPUS:0031539392
SN - 0022-0531
VL - 77
SP - 377
EP - 401
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 2
ER -