Low-quality leadership in a vertically differentiated duopoly with Cournot competition
We model a vertically differentiated duopoly with quantity-setting firms as an extended game in which firms noncooperatively choose the timing of moves at the quality stage, to show that at the subgame, perfect equilibrium sequential play obtains, with the low-quality firm taking the leader’s role.
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"Price competition, quality and income disparities,"
CORE Discussion Papers RP
370, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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