Information, Bertrand–Edgeworth competition and the law of one price

Myopic Oligopoly Pricing

“…As is well-known, existence of a pure-strategy Nash equilibrium in capacity-constrained pricing games critically depends on available production capacities. If capacities are large enough in Osborne and Pitchik (1986) and Edwards and Routledge (2019), amongst others. 10 We assume strict concavity for analytical convenience.…”

“…For example, Dixon (1990) shows that producers may no longer have an incentive to act as a monopolist on their contingent demand curve when there are cost to turning customers away. Other solutions along this line include Dixon (1992), Tasnádi (1999) and, more recently, Edwards and Routledge (2019). All this work concentrates on Nash solutions and is consequently based on best-rather than better-responses, which is the focus of our analysis.…”