Price competition in the Hotelling model with uncertainty on costs

Detalhes bibliográficos
Autor(a) principal: Alberto Pinto
Data de Publicação: 2015
Outros Autores: Telmo Parreira
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://repositorio.inesctec.pt/handle/123456789/6134
http://dx.doi.org/10.1080/02331934.2014.917304
Resumo: For the linear Hotelling model with firms located at the boundaries of the segment line, we study the price competition in a scenario of incomplete information in the production costs of both firms. We introduce the bounded uncertain costs (BUC) condition in the production costs and we prove that there is a local optimum price strategy if and only if the BUC condition holds. We compute explicitly the local optimum price strategy and we prove that it does not depend upon the distributions of the production costs of the firms, except on their first moments. We prove that the ex-post profit of a firm is smaller than its ex-ante profit if and only if the production cost of the other firm is greater than its expected cost.
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spelling Price competition in the Hotelling model with uncertainty on costsFor the linear Hotelling model with firms located at the boundaries of the segment line, we study the price competition in a scenario of incomplete information in the production costs of both firms. We introduce the bounded uncertain costs (BUC) condition in the production costs and we prove that there is a local optimum price strategy if and only if the BUC condition holds. We compute explicitly the local optimum price strategy and we prove that it does not depend upon the distributions of the production costs of the firms, except on their first moments. We prove that the ex-post profit of a firm is smaller than its ex-ante profit if and only if the production cost of the other firm is greater than its expected cost.2018-01-15T12:37:35Z2015-01-01T00:00:00Z2015info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://repositorio.inesctec.pt/handle/123456789/6134http://dx.doi.org/10.1080/02331934.2014.917304engAlberto PintoTelmo Parreirainfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-05-15T10:19:52Zoai:repositorio.inesctec.pt:123456789/6134Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:52:21.772175Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Price competition in the Hotelling model with uncertainty on costs
title Price competition in the Hotelling model with uncertainty on costs
spellingShingle Price competition in the Hotelling model with uncertainty on costs
Alberto Pinto
title_short Price competition in the Hotelling model with uncertainty on costs
title_full Price competition in the Hotelling model with uncertainty on costs
title_fullStr Price competition in the Hotelling model with uncertainty on costs
title_full_unstemmed Price competition in the Hotelling model with uncertainty on costs
title_sort Price competition in the Hotelling model with uncertainty on costs
author Alberto Pinto
author_facet Alberto Pinto
Telmo Parreira
author_role author
author2 Telmo Parreira
author2_role author
dc.contributor.author.fl_str_mv Alberto Pinto
Telmo Parreira
description For the linear Hotelling model with firms located at the boundaries of the segment line, we study the price competition in a scenario of incomplete information in the production costs of both firms. We introduce the bounded uncertain costs (BUC) condition in the production costs and we prove that there is a local optimum price strategy if and only if the BUC condition holds. We compute explicitly the local optimum price strategy and we prove that it does not depend upon the distributions of the production costs of the firms, except on their first moments. We prove that the ex-post profit of a firm is smaller than its ex-ante profit if and only if the production cost of the other firm is greater than its expected cost.
publishDate 2015
dc.date.none.fl_str_mv 2015-01-01T00:00:00Z
2015
2018-01-15T12:37:35Z
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dc.identifier.uri.fl_str_mv http://repositorio.inesctec.pt/handle/123456789/6134
http://dx.doi.org/10.1080/02331934.2014.917304
url http://repositorio.inesctec.pt/handle/123456789/6134
http://dx.doi.org/10.1080/02331934.2014.917304
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