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Heterogeneous or homogeneous quantity competition

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  • Kline, J. Jude

Abstract

We consider when homogeneous goods quantity competition models are payoff equivalent to heterogeneous goods models. When they are equivalent, changes in some cost parameters are equivalent to changes in some demand parameters. Going from homogeneous models to heteregeneous models is always possible, but the converse is not easy. We characterize when the converse is possible for linearly separable and multiplicatively separable heterogeneous models. These results have implications that blur the distinction between process and product innovation.
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Suggested Citation

  • Kline, J. Jude, 2000. "Heterogeneous or homogeneous quantity competition," Economics Letters, Elsevier, vol. 66(3), pages 353-359, March.
    • Handle: RePEc:eee:ecolet:v:66:y:2000:i:3:p:353-359
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    References listed on IDEAS

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    1. Bonanno, Giacomo & Haworth, Barry, 1998. "Intensity of competition and the choice between product and process innovation," International Journal of Industrial Organization, Elsevier, vol. 16(4), pages 495-510, July.
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    Cited by:

    1. Xiao, Tiaojun & Qi, Xiangtong, 2010. "Strategic wholesale pricing in a supply chain with a potential entrant," European Journal of Operational Research, Elsevier, vol. 202(2), pages 444-455, April.

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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