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The Cournot-Bertrand model and the degree of product differentiation

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  • Tremblay, Carol Horton
  • Tremblay, Victor J.

Abstract

We consider a duopoly model with a Cournot-type firm and a Bertrand-type firm. Both survive and the equilibrium is stable when there is sufficient product differentiation. With no differentiation, only the Cournot-type firm survives, and the outcome is perfectly competitive.

Suggested Citation

  • Tremblay, Carol Horton & Tremblay, Victor J., 2011. "The Cournot-Bertrand model and the degree of product differentiation," Economics Letters, Elsevier, vol. 111(3), pages 233-235, June.
  • Handle: RePEc:eee:ecolet:v:111:y:2011:i:3:p:233-235
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    References listed on IDEAS

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    1. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
    2. Beath,John & Katsoulacos,Yannis, 1991. "The Economic Theory of Product Differentiation," Cambridge Books, Cambridge University Press, number 9780521335522, April.
    3. Piercarlo Zanchettin, 2006. "Differentiated Duopoly with Asymmetric Costs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(4), pages 999-1015, December.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    5. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    6. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
    7. Arya, Anil & Mittendorf, Brian & Sappington, David E.M., 2008. "Outsourcing, vertical integration, and price vs. quantity competition," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 1-16, January.
    8. Hackner, Jonas, 2000. "A Note on Price and Quantity Competition in Differentiated Oligopolies," Journal of Economic Theory, Elsevier, vol. 93(2), pages 233-239, August.
    9. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
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    Cited by:

    1. repec:spr:annopr:v:238:y:2016:i:1:d:10.1007_s10479-015-2057-4 is not listed on IDEAS
    2. Manasakis, Constantine & Vlassis, Minas, 2014. "Downstream mode of competition with upstream market power," Research in Economics, Elsevier, vol. 68(1), pages 84-93.
    3. Rolf Färe & Shawna Grosskopf & Victor Tremblay, 2012. "Market Power and Technology," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(2), pages 139-146, March.
    4. Yang, Shilei & Shi, Victor & Jackson, Jonathan E., 2015. "Manufacturers׳ channel structures when selling asymmetric competing products," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 641-651.
    5. Elizabeth Schroeder & Victor Tremblay, 2015. "A Reappraisal of Strategic Trade Policy," Journal of Industry, Competition and Trade, Springer, vol. 15(4), pages 435-442, December.
    6. repec:eee:apmaco:v:251:y:2015:i:c:p:169-179 is not listed on IDEAS
    7. Ray-Yun Chang & Yan-Shu Lin & Jin-Li Hu, 2015. "Mixed Competition and Patent Licensing," Australian Economic Papers, Wiley Blackwell, vol. 54(4), pages 229-249, December.
    8. Naimzada, A.K. & Tramontana, F., 2012. "Dynamic properties of a Cournot–Bertrand duopoly game with differentiated products," Economic Modelling, Elsevier, vol. 29(4), pages 1436-1439.
    9. Qu, Chenrui & Wang, Grace W.Y. & Zeng, Qingcheng, 2017. "Modelling port subsidy policies considering pricing decisions of feeder carriers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 99(C), pages 115-133.
    10. repec:ebl:ecbull:eb-17-00555 is not listed on IDEAS
    11. Minas Vlassis & Stefanos Mamakis, 2016. "Is Price Competition More Efficient than Quantity Competition? A Reversal with Unionized Oligopolists," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 49(1), pages 103-126, August.
    12. repec:eee:apmaco:v:259:y:2015:i:c:p:427-437 is not listed on IDEAS
    13. Elizabeth Schroeder & Victor J. Tremblay, 2014. "Union Bargaining in an Oligopoly Market with Cournot-Bertrand Competition: Welfare and Policy Implications," Economies, MDPI, Open Access Journal, vol. 2(2), pages 1-14, March.

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