Bertrand oligopoly needs global demand functions which apply
to close substitutes. This is a problem, because economic theory
never supplied anything but local definitions for substitutes. Lancaster’s
“new theory of demand” is therefore invoked to supply one.
In its format one can also quantify closeness of substitutes and
incorporate optimisation of design. The present study focuses the
pure price dynamics for Bertrand oligopoly when the design of the
competing products is given, though quantified through Lancaster’s
approach. Resulting is some complex dynamics, including high
periodicity and chaos.