Loss of Efficiency due to Price Competition in Markets with Differentiated Products
In this paper we consider an oligopoly market where sellers compete through pricing several differentiated, substitutable products with the objective to maximize selfishly their own profit. We study the loss of efficiency (in terms of the total profit in the system) that occurs due to lack of coordination among the sellers in the system. The main contributions of this paper are that we provide (i) lower and upper bounds on the loss of efficiency when demand is an affine function of prices. The bounds only depend on the price sensitivity matrix characterizing the demand sellers face. (ii) We provide generalizations of these bounds for two families of nonlinear demands (convex and concave). These bounds are easy to compute.(iii) We discuss the tightness of the bounds and illustrate that the worst-case loss of efficiency value occurs for identical sellers. (iv) Finally, we discuss how the loss of efficiency in the system profit gets affected by the presence of capacities.
Loss of efficiency price of anarchy Bertrand competition revenue management.
国际会议
2007 International Conference on Manufacturing & Service Operations Management(2007制造与服务运作管理国际学术会议)
北京
英文
2007-06-18（万方平台首次上网日期，不代表论文的发表时间）