Undercut-Proof Equilibria with Multiple Firms
16 Pages Posted: 1 Dec 2013 Last revised: 27 Mar 2015
Date Written: March 26, 2015
This short article provides formulae for computing the undercut-proof equilibrium prices in a differentiated products industry with any finite number of firms. The formulae are very simple and can be easily implemented with a typical spreadsheet to solve for the unique equilibrium prices.
Keywords: Undercut-Proof Equilibrium, Differentiated Products, Multiple firms, Conjectural Variations
JEL Classification: L1, D43
Suggested Citation: Suggested Citation