Nonuniform Bertrand competition

Article Abstract:

A Bertrand equilibrium solution is derived for nonuniform pricing strategies. Given free entry, this involves minimum average cost (MAC) production with zero-profit. All prices will equal MAC in the event that average cost is minimum below market output. The conditions needed to bring about this result are enumerated. Consumers pay at the most a rate equal to marginal cost. Profits, if any, as well as marginal costs, are equal among firms.

Pricing

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Stochastic monotonicity and stationary distributions for dynamic economies

Article Abstract:

Stochastically monotonic processes with invariant distributions are analyzed using the Knaster-Tarski fixed point theorem. A monotonic Markov process will globally converge to a unique stationary distribution given the application of Topkis' theory of supermodular functions to stochastic dynamic optimization. The results have important implications for stochastic growth, industry equilibrium dynamics and investment theory.

Markov processes, Stochastic processes, Distribution (Probability theory), Stationary processes

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Entry, exit, and firm dynamics in long run equilibrium

Article Abstract:

A dynamic stochastic model is developed and analyzed. The model depicts a competitive industry with endogenously determined processes for entry and exit while presenting firm output and employment. Stationary equilibrium is analyzed by including entry, exit and heterogeneity of firm size and growth rate in long run industry equilibrium theory. The study provides implications for profit distribution and firm size.

Usage, Stochastic analysis, Barriers to entry (Industrial organization), Barriers to entry

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