Changes

Recall that Reinganum (1979) has firms with marginal costs drawn from a distribution <math>G(m)\,</math>. Suppose that an individual firm's cost is <math>m_j\,</math>, and that a fraction <math>\lambda\,</math> (<math>\lambda \in \left [0,1 \right )\,</math>) of firms price above <math>r. </math>. Then:

\mathbb{E}\pi_j =

(p_j-m_j)q(p_j)\left ( \frac{\mu}{1-lambda} \right ) & \mbox{if}\; p_j \le r \\0 & \mbox{if}\; p_j > r