Differentiated Bertrand Competition
A variation of Bertrand competition where firms compete on price but also differentiate their products, leading to different strategic outcomes compared to standard Bertrand models.
Implications
A market structure in which firms compete by setting prices for differentiated products, where each firm�s pricing strategy affects not only its own demand but also the demand faced by competitors, used to model competitive behavior in markets with similar but not identical products.
Example
Example: Two smartphone manufacturers engage in differentiated Bertrand competition, setting prices for their unique models while considering the potential impact on each other's market share.
Related Terms
Different from standard Bertrand competition, which assumes homogeneous products, differentiated competition accounts for variations in product features and brand identity.
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