Question

Find one example of a Bertrand game (or something close) from the business world. The example may be recent or from the distant past and may include more than two players but, of course, the industry must be an oligopoly. Describe the situation and how closely it comes to the Bertrand game. Include the players, their strategies, and the outcome.

Answer 1

The closest game to bertrand competition in recent times can be dedicated to Coca Cola and Pepsi. Both the companies produce differentiated products. These are the major companies which sell such drinks with a few very insignificant competitors who can be ignored. Both the companies have priced their products simultaneously at low levels to attract customers and capture maximum market share.

As various news reports suggest, both the companies have slashed down prices significantly to very close the cost of production, which in turn has helped the customers who are enjoying the low price. Coke recently slashed their price to a large extent and has seen immediate rise in market share, whereas, that of Pepsi fell down slightly.