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First and Second Mover Advantage in Asymmetric Price Duopoly

Author

Listed:
  • Rabah Amir

    (University of Copenhagen)

  • Anna Stepanova

    (University of Southern Denmark at Odense)

Abstract

We consider the issue of first versus second mover advantage in differentiated-product Bertrand duopoly with asymmetric linear costs. We provide a generalization of some well-known results in the cases where prices are strategic substitutes or complements, dispensing with extraneous assumptions of single-valued optimal reactions, uniqueness of Bertrand equilibrium, ... We also consider a new mixed case. Our approach is based on the theory of supermodular optimization/games. Furthermore, we show that even when prices are strategic complemnts, one firm may have a first mover advantage under a linear demand.

Suggested Citation

  • Rabah Amir & Anna Stepanova, 2000. "First and Second Mover Advantage in Asymmetric Price Duopoly," Econometric Society World Congress 2000 Contributed Papers 1161, Econometric Society.
  • Handle: RePEc:ecm:wc2000:1161
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    Cited by:

    1. Mylovanov, Tymofiy, 2005. "First-mover disadvantage," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 127, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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