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Cost Variations in a Differentiated Good Oligopoly

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  • Jens Jurgan

Abstract

In the homogenous good case, the relationship between market struc- ture and efficiency was studied extensively. Assuming a standard quadratic utility with quantity competition, this paper carries on the analysis in a differentiated good context. It can be shown that there is a positive re- lationship between market heterogeneity and efficiency, too. In contrast to the homogenous good case, consumer surplus as well as producer surplus increases with the dispersion of marginal costs.

Suggested Citation

  • Jens Jurgan, 2009. "Cost Variations in a Differentiated Good Oligopoly," Working Papers 069, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:069_jurgan
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    File URL: http://www.bgpe.de/texte/DP/069_jurgan.pdf
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    References listed on IDEAS

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    1. Keisuke Hattori & Keisaku Higashida, 2012. "Misleading advertising in duopoly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(3), pages 1154-1187, August.

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    More about this item

    Keywords

    Differentiated goods; Cournot; Asymmetric costs; Cost variation; Welfare;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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