Bertrand's price competition in markets with fixed costs

We analyze Bertrand's price competition in a homogenous good market with a fixed cost and an increasing marginal cost (i.e., with variable returns to scale). If the fixed cost is avoidable, we show that the non-subadditivity of the cost function at the output corresponding to the oligopoly break-even price, denoted by D(pL(n)), is su±cient to guarantee that the market supports an equilibrium in pure strategies with two or more active firms supplying at least D(pL(n)). Conversely, the existence of a pure strategy equilibrium ensures that the cost function is not subadditive at every output greater than or equal to D(pL(n)). As a by-product, the latter implies that the average cost cannot be decreasing over the range of outputs mentioned before. In addition, we also prove that the existence of a price-taking equilibrium is sufficient, but not necessary, for Bertrand's price competition to possess an equilibrium in pure strategies. This provides a simple existence result for the case where the fixed cost is fully unavoidable.

Bertrand's price competition in markets with fixed costs

This paper provides necessary and sufficient conditions for the existence of a pure strategy Bertrand equilibrium in a model of price competition with fixed costs. It unveils an interesting and unexplored relationship between Bertrand competition and natural monopoly. That relationship points out that the non-subadditivity of the cost function at the output level corresponding to the oligopoly break-even price, denoted by D(pL (n)), is sufficient to guarantee that the market supports a (not necessarily symmetric) Bertrand equilibrium in pure strategies with two or more firms supplying at least D(pL (n)). Conversely, the existence of a pure strategy equilibrium ensures that the cost function is not subadditive at every output greater than or equal to D(p(n)).Bertrand competition, cost subadditivity, fixed costs, natural monopoly.

Propuesta para la implementación de un centro de capacitación móvil para el recinto Caimito, provincia de Guayas.

Se realizó la presente investigación para conocer la viabilidad de implementar un Centro de Capacitación Móvil para los habitantes del recinto El Caimito. El estudio en general se orienta al desarrollar un plan de capacitación para adultos mayores de 35 años y menores de 60 años de la zona rural de El Caimito que no tienen acceso a la tecnología partiendo desde los antecedentes, la formulación del problema que en este caso es el analfabetismo tecnológico, continuando con la justificación y el objetivo el cual es desarrollar una propuesta para la creación de un de centro de capacitación tecnológico móvil, propuesta, que permita a los habitantes del recinto El Caimito aplicar las TIC’s e incorporarlas a sus actividades cotidianas con el fin de disminuir la brecha tecnológica La metodología utilizada en la investigación fue el método deductivo , y la información fue obtenida a través de la encuesta lo que permitió la identificación de los problemas. Cabe recalcar que la propuesta planteada para la implementación del centro de capacitación móvil presentada dentro de este trabajo, constituye una vía óptima para lograr el objetivo propuesto.This research determines the feasibility of implementing a Mobile Training Center for the habitants of the El Caimito was performed. The overall study aims to develop a training plan for adults aged 35 years and under 60 years of rural area of El Caimito who do not have access to technology starting from the background, problem formulation in this case is technological illiteracy, continuing justification and the objective which is to develop a proposal for the creation of a center of mobile technology training proposal, which would allow the inhabitants of the enclosure El Caimito apply TIC’s and incorporate them into their daily activities in order to reduce the technology gap. The methodology used in the research was the deductive method, and the information was obtained through the survey which allowed the identification of problems. It should be noted that the proposal made for the implementation of mobile training center presented in this work, is an optimal way to achieve the objective

Estimation of Demand Systems Based on Elasticities of Substitution

This paper develops a model for demand-system estimations, whose coefficients are own-price Marshallian elasticities and elasticities of substitution between goods. The model satisfies the homogeneity, symmetry and, eventually, adding-up restrictions implied by consumer theory. It is primarily useful for the estimation of the demands of several goods of the same industry or group of products. The characteristics of the model are compared to other existing alternatives (logarithmic, translog, AIDS and QUAIDS demand systems). The model is finally applied to estimate the demands for several carbonated soft drinks in Argentina, and its results are presented together with the ones obtained with the other estimation methods

Damages for Breach of Contract, Impossibility of Performance and Legal Enforceability

This paper develops a game-theoretic model of a contract between a creditor and a debtor where equilibrium depends on the damage rule chosen for breach-of-contract situations, the use of impossibility-of-performance excuses and the level of legal contract enforceability. We find that, under perfect legal enforceability, the different alternative damage rules (based on expectation or reliance damages, with or without performance excuses) are able to induce an efficient performance by the contracting parties. But we also find that, if legal enforceability is imperfect, then a rule based on expectation damages with an excuse for impossibility of performance is likely to be more efficient than the other alternative damage rules.