New oligopoly study reveals game-changing pricing incentives for small firms.
The article explores how pricing competition works among three companies. It shows that when firms have different sizes, the equilibrium prices can be very different from when they are all the same size. The study reveals that in this scenario, there can be many possible equilibria, the smallest firm can make the most profit per unit, and each firm may use different pricing strategies. This is a new and important discovery in pricing competitions.