Firms' Payoffs in a Bertrand‐Edgeworth Game Under Triopoly

Abstract

ABSTRACT This paper studies Bertrand‐Edgeworth competition among firms producing a homogeneous commodity under efficient rationing and constant (and identical across firms) marginal cost until full capacity utilization is reached. The focus is on the equilibrium payoffs under triopoly when the demand function is defined on the set of the non‐negative prices, where it is continuous and non‐negative, and it is strictly decreasing, twice differentiable and such that its nominal value is stricly concave over the range in which it is positive. The payoffs of all firms are determined.