THE ROLE OF FIXED ENTRY COSTS IN AN EVOLUTIONARY ENTRY GAME WITH BERTRAND PLAYERS

Uğur SOYTAŞ

Article Details

THE ROLE OF FIXED ENTRY COSTS IN AN EVOLUTIONARY ENTRY GAME WITH BERTRAND PLAYERS

Authors:

Uğur SOYTAŞ

Publisher:

Hacettepe University

Main Topics:

Sociology and anthropology

Journal:

Hacettepe University Journal of Economics and Administrative Sciences 2005 Vol.23 Issue 2, pp.207-219

Document Type:

Article

Publication Date:

12/2005

Document Language:

Turkish

Document ID (Org No.):

2000456206

Frequency:

Quarterly

eISSN:

1309-6338

pISSN:

1301-8752

Abstract:

 

This paper analyzes the role of fixed costs in an evolutionary entry game with Bertrand players. A stable state fails to exist when entry is free, regardless of whether capacity constraints are present or not. When a fixed entry cost is introduced, there is a unique evolutionarily stable strategy (ESS) identical to the ESS outcome of Soytas and Becker (2003) and resembling the separating equilibrium of Milgrom and Roberts (1982). The unique ESS emerges even when capacity constraints are imposed. However, the fixed cost must be sufficiently large for the ESS to prevail if the incumbent has capacity limitations.

 

Bu makalede fiyat bazlı rekabet eden oyuncuların bulunduğu evrimsel bir piyasaya giriş oyununda sabit maliyetlerin rolü incelenmiştir. Kapasite kısıtlamaları olsun veya olmasın, giriş serbest iken popülasyonun kararlı bir dengesi yoktur. Sabit maliyetler modele eklendiğinde ise tek bir evrimsel kararlı stratejiler vektörü ortaya çıkmaktadır. Bu evrimsel kararlı stratejiler Soytas ve Becker (2003) de bulunan evrimsel kararlı stratejilere ve Milgrom ve Roberts’ın (1982) ortaya koyduğu ayrıştırılabilir dengedeki stratejilere benzeşmektedir. Fakat kapasite kısıtlamaları söz konusuyken bulunan dengenin kararlı olabilmesi için sabit maliyetlerin yeterince büyük olması gerekmektedir.

Article Details

THE ROLE OF FIXED ENTRY COSTS IN AN EVOLUTIONARY ENTRY GAME WITH BERTRAND PLAYERS

Authors: Uğur SOYTAŞ

Publisher: Hacettepe University

Main Topics: Sociology and anthropology

Journal: Hacettepe University Journal of Economics and Administrative Sciences 2005 Vol.23 Issue 2, pp.207-219

Document Type: Article

Publication Date: 12/2005

Document Language: Turkish

Document ID (Org No.): 2000456206

Frequency: Quarterly

eISSN: 1309-6338

pISSN: 1301-8752

Issues

Authors:

Uğur SOYTAŞ

Publisher:

Hacettepe University

Main Topics:

Sociology and anthropology

Journal:

Hacettepe University Journal of Economics and Administrative Sciences 2005 Vol.23 Issue 2, pp.207-219

Document Type:

Article

Publication Date:

12/2005

Document Language:

Turkish

Document ID (Org No.):

2000456206

Frequency:

Quarterly

eISSN:

1309-6338

pISSN:

1301-8752