Nash equilibrium with mark-up-pricing oligopolists

Abstract

If business managers formulate strategies in terms of mark-ups, then it is natural to think they will think of their rivals’ actions in these terms. For a market characterized by constant elasticity of demand and supply, the mark-up equilibrium is derived and compared with the traditional monopoly, Cournot and perfectly competitive equilibria. We also compute the ‘revenue as strategy’ equilibria. Show more