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Relative profit maximization and Bertrand equilibrium with quadratic cost functions
Economics and Business Letters
View Archive Info| Field | Value | |
| Title |
Relative profit maximization and Bertrand equilibrium with quadratic cost functions
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| Creator |
Satoh, Atsuhiro
Tanaka, Yasuhito |
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| Description |
We study the Bertrand equilibrium in duopoly in which two firms produce a homogeneous good under quadratic cost functions, and they seek to maximize the weighted sum of their absolute and relative profits. We show that there exists a range of the equilibrium prices in duopolistic equilibria. This range of equilibrium prices is narrower and lower than the range of the equilibrium prices in duopolistic equilibria under pure absolute profit maximization, and the larger the weight on the relative profit, the narrower and lower the range of the equilibrium prices. In this sense relative profit maximization is more aggressive than absolute profit maximization.
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| Publisher |
Oviedo University Press
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| Contributor |
—
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| Date |
2013-09-23
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — |
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| Format |
application/pdf
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| Identifier |
http://www.unioviedo.es/reunido/index.php/EBL/article/view/9999
10.17811/ebl.2.3.2013.134-139 |
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| Source |
Economics and Business Letters; Vol 2, No 3 (2013): September - Special Issue: Selected papers from 11th International Economic Policy Conference; 134-139
Economics and Business Letters; Vol 2, No 3 (2013): September - Special Issue: Selected papers from 11th International Economic Policy Conference; 134-139 2254-4380 10.17811/ebl.2.3.2013 |
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| Language |
eng
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| Relation |
http://www.unioviedo.es/reunido/index.php/EBL/article/view/9999/9780
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| Rights |
Copyright (c) 2014 Economics and Business Letters
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