טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
Ph.D Thesis
Ph.D StudentGayer Amit
SubjectOligopoly, Endogenous Monopolist and Product Quality
DepartmentDepartment of Industrial Engineering and Management
Supervisors Professor Benyamin Shitovitz
Professor Abraham Subotnik


Abstract

This work investigates an oligopolistic market with vertical product differentiation, where qualities are represented by an uni-dimensional interval. We examine the Bertrand-Nash equilibrium in the oligopoly game with a finite number of consumers, where each firm uses its technology and can offer a range of quality-price pairs, and firms’ profits are determined by the consumer’ selection choice. We show that under the standard conditions on consumers’ preferences at most one firm with a positive profit can be sustained in equilibrium. We also present an example of a duopoly market where a Bertrand-Nash equilibrium fails to exist. We also show that in the case of multiple symmetric firms there are only zero profit equilibria. Finally, we apply our results to the linear case.