In this paper, the authors characterize the equilibria of Stackelberg duopolies with differentiated products, where the firms are fighting either in prices and quantities or in prices and serving capacities. It is shown that in the price-quantity case there is always rationing by the leader, but in the price-serving capacity case the leader is rationing only if the goods are close substitutes. Hence, rationing may appear as an equilibrium results. This kind of equilibrium is specific to the Stackelberg competition. Rationing never appears in a duopoly (with the same strategy spaces) where the firm moves are simultaneous. Copyright 1989 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 30 (1989) Issue (Month): 4 (November) Pages: 877-88 Download reference. The following formats are available: HTML
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