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On Stackelberg Equilibria with Differentiated Products: The Critical Role of the Strategy Space

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  • Boyer, Marcel
  • Moreaux, Michel

Abstract

Comparing the Nash and Stackelberg equilibria in a differentiated-products model under price and for quantity strategy s paces, it is shown that, whatever the role (leader, follower, Nash co mpetitor), it is always more profitable to be a quantity (price) sett er if the goods are substitutes (complements). However, for the consu mer, price competition is always the best. Concerning total surpluses , the ranking is first the Bertrand equilibrium, then the price Stack elberg, followed by the mixed Nash, the quantity Stackelberg, and the Cournot equilibria for both the complement and substitute cases. Copyright 1987 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Industrial Economics.

Volume (Year): 36 (1987)
Issue (Month): 2 (December)
Pages: 217-30

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Handle: RePEc:bla:jindec:v:36:y:1987:i:2:p:217-30

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Cited by:
  1. Boyer, Marcel & Moreaux, Michel, 1985. "La convergence d’équilibres stratégiques en prix-quantités vers l’équilibre concurrentiel," L'Actualité Economique, Société Canadienne de Science Economique, vol. 61(4), pages 411-427, décembre.
  2. Kovenock, Dan & Widdows, Kealoha, 1998. "Price leadership and asymmetric price rigidity," European Journal of Political Economy, Elsevier, vol. 14(1), pages 167-187, February.
  3. Luca Lambertini, 1996. "Strategic Delegation and the Shape of Market Competition," Working Papers 267, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. L. Lambertini & S. Poddar & D. Sasaki, 1998. "RJV in Product Innovation and the Form of Market Competition," Working Papers 343, Dipartimento Scienze Economiche, Universita' di Bologna.
  5. Luca Lambertini, 2000. "Extended Games Played by Managerial Firms," The Japanese Economic Review, Japanese Economic Association, vol. 51(2), pages 274-283, 06.
  6. Giulio ECCHIA & Luca LAMBERTINI, 2001. "Endogenous Timing and Quality Standards in a Vertically Differentiated Duopoly," Discussion Papers (REL - Recherches Economiques de Louvain) 2001021, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  7. Marcella Scrimitore, 2010. "Managerial Incentives and Stackelberg Equilibria in Oligopoly," EERI Research Paper Series EERI_RP_2010_39, Economics and Econometrics Research Institute (EERI), Brussels.
  8. Luca Lambertini, 1996. "The International Coordination of Monetary Policy: A Game-Theoretic Reformulation," Working Papers 250, Dipartimento Scienze Economiche, Universita' di Bologna.
  9. Luca Lambertini, 1997. "Time Consistency in Games of Timing," Discussion Papers 97-10, University of Copenhagen. Department of Economics.
  10. Lambertini, Luca, 1997. "Unicity of the equilibrium in the unconstrained Hotelling model," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 785-798, November.
  11. Luca Lambertini, 1995. "Cournot Vs Stackelberg Equilibria With Entrepreneurial and Labour Managed Firms," Working Papers 217, Dipartimento Scienze Economiche, Universita' di Bologna.
  12. Goddard, Ellen W. & Shank, Benjamin & Panter, Chris & Nilsson, Tomas K.H. & Cash, Sean B., 2007. "Canadian Chicken Industry: Consumer Preferences, Industry Structure and Producer Benefits from Investment in Research and Advertising," Project Report Series 52088, University of Alberta, Department of Resource Economics and Environmental Sociology.
  13. Boyer, M. & Moreaux, M., 1985. "L'equilibre Concurrentiel Comme Limite de Suites D'equilibres Strategiques de Stackelberg," Cahiers de recherche 8527, Universite de Montreal, Departement de sciences economiques.
  14. Sang-Ho Lee, 2002. "Pricing, Quality-Setting, and Order of Plays in an Online Information Market," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(3), pages 179-191, December.
  15. Banerjee, Dyuti S. & Chatterjee, Ishita, 2014. "Exploring Stackelberg profit ordering under asymmetric product differentiation," Economic Modelling, Elsevier, vol. 36(C), pages 309-315.
  16. Acharyya, Rajat & Marjit, Sugata, 1998. "To Liberalize or Not to Liberalize an LDC-Market with an Inefficient Incumbent," International Review of Economics & Finance, Elsevier, vol. 7(3), pages 277-296.
  17. Thierry Lafay, 2010. "A linear generalization of Stackelberg’s model," Theory and Decision, Springer, vol. 69(2), pages 317-326, August.

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