Quantum Bertrand duopoly with differentiated products

We apply Li et al.'s "minimal" quantization rules [Phys. Lett. A 306 (2002) 73] to investigate the quantum version of the Bertrand duopoly with differentiated products. In particular, we have examined how the quantum entanglement affects the outcome of the classical game. It is found that while negative entanglement diminishes the profit of each firm below the classical limit, positive entanglement enhances the profit monotonically., reaching a maximum in the limit of maximal entanglement. As a consequence, the frustrating dilemma-like situation is completely resolved in the quantum version of the game. (C) 2003 Elsevier B.V. All rights reserved.