THE DYNAMICS OF BERTRAND PRICE COMPETITION WITH COST‐REDUCING INVESTMENTS
将经典伯特兰双头垄断价格竞争模型扩展到动态环境，研究企业投资随机改进生产技术以超越对手并获取暂时低成本领导地位时的均衡特征。
Abstract We extend the classic Bertrand duopoly model of price competition to a dynamic setting where competing duopolists invest in a stochastically improving production technology to “leapfrog” their rival and attain temporary low‐cost leadership. We find a huge multiplicity of Markov‐perfect equilibria (MPE) and show that when firms move simultaneously the set of all MPE payoffs is a triangle that includes monopoly payoffs and a symmetric zero mixed strategy payoff. When firms move asynchronously, the set of MPE payoffs is strictly within this triangle, but there still is a vast multiplicity of MPE, most of which involve leapfrogging.