Winner-take-all price competition
- Cite this article as:
- Baye, M. & Morgan, J. Econ Theory (2002) 19: 271. doi:10.1007/PL00004212
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We analyze an oligopoly model of homogeneous product price competition that allows for discontinuities in demand and/or costs. Conditions under which only zero profit equilibrium outcomes obtain in such settings are provided. We then illustrate through a series of examples that the conditions provided are “tight” in the sense that their relaxation leads to positive profit outcomes.