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A Note on Cost-reducing Alliances in Vertically Differentiated Oligopoly

Author

Listed:
  • Frédéric Deroïan

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

In a vertically differentiated oligopoly, firms raise cost-reducing alliances before competing with each other. It is shown that heterogeneity in quality and in cost functions reduces individual incentives to form links. Furthermore, both differentiated Cournot and Bertrand competition qualitatively similar incitations to form alliances.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Frédéric Deroïan, 2004. "A Note on Cost-reducing Alliances in Vertically Differentiated Oligopoly," Post-Print halshs-00369726, HAL.
    • Handle: RePEc:hal:journl:halshs-00369726
    as

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    References listed on IDEAS

    as
    1. Goyal, Sanjeev & Joshi, Sumit, 2003. "Networks of collaboration in oligopoly," Games and Economic Behavior, Elsevier, vol. 43(1), pages 57-85, April.
    2. Francis Bloch, 1995. "Endogenous Structures of Association in Oligopolies," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 537-556, Autumn.
    3. Robert P. Gilles & Cathleen Johnson, 2000. "original papers : Spatial social networks," Review of Economic Design, Springer;Society for Economic Design, vol. 5(3), pages 273-299.
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    5. Symeonidis, George, 2003. "Quality heterogeneity and welfare," Economics Letters, Elsevier, vol. 78(1), pages 1-7, January.
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    More about this item

    Keywords

    Differentiated Oligopoly; Firms's Heterogeneity; Cost-Reducing Alliances; Stability;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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