A Note on Price and Quantity Competition in Differentiated Oligopolies

Häckner, Jonas

doi:10.1006/jeth.2000.2654

Cited by 402 publications

(274 citation statements)

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“…To check the robustness of my results with respect to other specifications of demand, I analyse in the appendix an alternative extension of the quadratic utility model, following Häckner (2000). The results from this alternative demand system are very similar to those presented in the main body of the paper: all the propositions proved below are robust to the choice of demand specification.…”

Section: The Modelmentioning

confidence: 54%

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Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D

Symeonidis

2003

International Journal of Industrial Organization

162

108

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This paper compares Bertrand and Cournot equilibria in a differentiated duopoly with substitute goods and product R&D. I find that R&D expenditure, prices and firms' net profits are always higher under quantity competition than under price competition. Furthermore, output, consumer surplus and total welfare are higher in the Bertrand equilibrium than in the Cournot equilibrium if either R&D spillovers are weak or products are sufficiently differentiated. If R&D spillovers are strong and products are not too differentiated, then output, consumer surplus and total welfare are lower in the Bertrand case than in the Cournot case. Thus a key finding of the paper is that there are circumstances where quantity competition can be more beneficial than price competition both for consumers and for firms.

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Section: The Modelmentioning

confidence: 54%

“…I analyse here an alternative version of the quality-augmented quadratic utility model, following Häckner (2000). The structure of the game is the same as before.…”

Section: Appendixmentioning

confidence: 99%

Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D

Symeonidis

2003

International Journal of Industrial Organization

162

108

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“…Zanchettin (2006) shows that this result extends to duopolies with exogenous cost differences while for symmetric cost structures the result also extends to an oligopoly (Vives 1985). Häckner (2000) reveals however that in an oligopoly of complementary goods with exogenous quality differences the low-quality firms may charge higher prices under Bertrand competition than under Cournot competition. The switch from Cournot competition to Bertrand competition induces the high-quality firms to charge a lower price.…”

Section: Introductionmentioning

confidence: 86%

Dynamic efficiency of Cournot and Bertrand competition: input versus output spillovers

Hinloopen

Vandekerckhove

2009

J Econ

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We consider the efficiency of Cournot and Bertrand equilibria in a duopoly with substitutable goods where firms invest in process R&D that generates input spillovers. Under Cournot competition firms always invest more in R&D than under Bertrand competition. More importantly, Cournot competition yields lower prices than Bertrand competition when the R&D production process is efficient, when spillovers are substantial, and when goods are not too differentiated. The range of cases for which total surplus under Cournot competition exceeds that under Bertrand competition is even larger as competition over quantities always yields the largest producers' surplus.

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“…A substantial body of the literature (see e.g., For instance, Cheng (1985) and Vives (1985) generalized these results respectively by means of a geographic approach and by considering the n-…rm oligopoly case with general demand functions. Dastidar (1997) and Häckner (2000), instead, pointed out the sensitivity of the results in Singh and Vives to the sharing rules governing oligopoly and to the type of product di¤erentiation. 1 We demonstrate that the standard conclusions about price and quantity competition can be altered in the context of a vertically related market.…”

Section: Introductionmentioning

confidence: 99%

Price vs. quantity competition in a vertically related market

2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editor. Cournot competition yields higher output, lower wholesale prices, lower …nal prices, higher consumers'surplus, and higher total welfare than Bertrand competition. Terms of use: Documents in

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A Note on Price and Quantity Competition in Differentiated Oligopolies

Cited by 402 publications

References 3 publications

Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D

Comparing Cournot and Bertrand equilibria in a differentiated duopoly with product R&D

Dynamic efficiency of Cournot and Bertrand competition: input versus output spillovers

Price vs. quantity competition in a vertically related market

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