A model of duopolistic price competition with variable elasticity in demand

A model of duopolistic price competition with variable elasticity in demand

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Article ID: iaor20031143
Country: Cuba
Volume: 23
Issue: 2
Start Page Number: 185
End Page Number: 196
Publication Date: May 2002
Journal: Revista de Investigacin Operacional
Authors: , ,
Keywords: location
Abstract:

Demand elasticity affects price policy. In this work, two different scenarios are analyzed: inelastic demand and linear demand as a particular case of elastic demand. In this problem two firms decide locations on a network and prices in a set of spatial separated markets. The competence process is modeled as a two-stage game, locations are decided first and then prices. Nash equilibrium existence in the second stage and a nodal property on the first stage are proved.

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