Abstract
We consider a price competition between two sellers of perfect-complement goods. Each seller posts a price for the good it sells, but the demand is determined according to the sum of prices. This is a classic model by Cournot (1838), who showed that in this setting a monopoly that sells both goods is better for the society than two competing sellers. We show that non-trivial pure Nash equilibria always exist in this game. We also quantify Cournot's observation with respect to both the optimal welfare and the monopoly revenue. We then prove a series of mostly negative results regarding the convergence of best response dynamics to equilibria in such games.
| Original language | English |
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| Title of host publication | 44th International Colloquium on Automata, Languages, and Programming, ICALP 2017 |
| Editors | Anca Muscholl, Piotr Indyk, Fabian Kuhn, Ioannis Chatzigiannakis |
| Publisher | Schloss Dagstuhl- Leibniz-Zentrum fur Informatik GmbH, Dagstuhl Publishing |
| ISBN (Electronic) | 9783959770415 |
| DOIs | |
| State | Published - 1 Jul 2017 |
| Event | 44th International Colloquium on Automata, Languages, and Programming, ICALP 2017 - Warsaw, Poland Duration: 10 Jul 2017 → 14 Jul 2017 |
Publication series
| Name | Leibniz International Proceedings in Informatics, LIPIcs |
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| Volume | 80 |
| ISSN (Print) | 1868-8969 |
Conference
| Conference | 44th International Colloquium on Automata, Languages, and Programming, ICALP 2017 |
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| Country/Territory | Poland |
| City | Warsaw |
| Period | 10/07/17 → 14/07/17 |
Bibliographical note
Publisher Copyright:© Moshe Babaioff, Liad Blumrosen, and Noam Nisan;.
Keywords
- Complements
- Game theory
- Networks
- Price of stability
- Pricing