Vertical Differentiation, Trade and Endogenous Common Standards
AbstractDifferent market settings are considered in a free trade environment, where firms can choose technology, quality, and price or quantity. The shape of competition in prices requires the intervention of governments, via a common antidumping policy to make firms converge on the simultaneous equilibrium which is socially optimal. In the Cournot framework, the equilibria we obtain impinge upon the kind of precommitments undertaken by firms. The coincidence between firms’ behaviour and social preference obtains either when competition is tough, since income is low, or when firms must compete in quantities in the market stage, since they cannot modify qualities. The spontaneous coordination over common standards has to be contrasted with both the case of affluent consumers and Bertrand competition.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 1997-18.
Length: 27 pages
Date of creation: Sep 1997
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technology; standard coordination;
Other versions of this item:
- L. Lambertini & G. Rossini, 1996. "Vertical Differentiaiton, Trade and Endogenous Common Standards," Working Papers 263, Dipartimento Scienze Economiche, Universita' di Bologna.
- Lambertini, L. & Rossini, G., 1997. "Vertical Differentiation, Trade and Endogenous Common Standards," ASSET - Instituto De Economia Publica 160, ASSET (Association of Southern European Economic Theorists).
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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