Bertrand competition when firms hold passive ownership stakes in one another

Sandro Shelegia, Yossi Spiegel*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

35 Scopus citations

Abstract

We show that the Bertrand oligopoly model with cost asymmetries may admit multiple Nash equilibria when firms hold passive ownership stakes in each other. The equilibrium price may be as high as the monopoly price of the most efficient firm.

Original languageEnglish
Pages (from-to)136-138
Number of pages3
JournalEconomics Letters
Volume114
Issue number1
DOIs
StatePublished - Jan 2012

Keywords

  • Bertrand oligopoly
  • Cost asymmetry
  • Partial cross ownership

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