Abstract
This paper provides a game-theoretic analysis of price-sustainable industry configurations in natural monopoly. We show that the sustainable configuration is the unique Nash equilibrium, and that it is also von Stackelberg equilibrium if any firm has to fulfill all demand at the quoted price. Furthermore, given this assumption, even configurations that are not price-sustainable according to the contestability theory are Nash equilibria.
| Original language | English |
|---|---|
| Pages (from-to) | 135-139 |
| Number of pages | 5 |
| Journal | Journal of Economics and Business |
| Volume | 46 |
| Issue number | 2 |
| DOIs | |
| State | Published - May 1994 |