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Price leadership in a vertically differentiated market

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  • Li, Youping

Abstract

This paper compares the equilibrium outcomes under simultaneous and sequential price settings in a vertically differentiated market. When the timing of the price game is determined endogenously, it is shown that the sequential play with the high quality firm leading emerges, yielding the highest industry profit but the lowest social welfare among the different timings.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 38 (2014)
Issue (Month): C ()
Pages: 67-70

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Handle: RePEc:eee:ecmode:v:38:y:2014:i:c:p:67-70

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Vertical differentiation; Price leadership; Endogenous timing; Welfare;

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References

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  17. Shaked, Avner & Sutton, John, 1982. "Relaxing Price Competition through Product Differentiation," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 3-13, January.
  18. Tsuyoshi Toshimitsu & Naoto Jinji, 2007. "Quality Differentiation, Welfare, And The Mode Of Competition In A Vertically Differentiated Product Market: A Note," The Japanese Economic Review, Japanese Economic Association, vol. 58(3), pages 407-416.
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