Discrete Dynamics in Nature and Society
Volume 6 (2001), Issue 1, Pages 1-10
Bertrand oligopoly revisited
Department of Economics, Umeå University, Umeå SE-90187, Sweden
Received 10 February 2000
Copyright © 2001 Tönu Puu. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This paper reconsiders Bertrand duopoly and oligopoly in the spatial formulation due to Hotelling, 1929. The equilibrium configurations of price and location structure are considered, given elastic demand, and a full dynamics is formulated in order to check for
stability of equilibrium and the possibilities of complex dynamics, such as occurs easily with Cournot oligopoly. The main discussion concerns Hotelling's original case of two sellers on a given interval, though results for different cases, such as three firms on a circle, and lattices in 2D are indicated.