Price vs quantity in a duopoly supergame with Nash punishments
We examine the endogenous choice between price and quantity behaviour in a duopoly supergame with product differentiation. We find that (i) if cartel profits are evenly split between firms, then only symmetric equilibria obtains; (i) if instead the additional profits available through collusion are split according to the Nash bargaining solution, there are parameter regions where all subgame perfect equilibria are asymmetric, with firms colluding in price-quantity supergames.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Hamilton, J.H. & Slutsky, S.M., 1988. "Endogenous Timing In Duopoly Games: Stackelberg Or Cournot Equilibria," Papers 88-4, Florida - College of Business Administration.
- Ross, Thomas W., 1992.
"Cartel stability and product differentiation,"
International Journal of Industrial Organization,
Elsevier, vol. 10(1), pages 1-13, March.
- Tom Ross, 1990. "Cartel Stability And Product Differentiation," Carleton Industrial Organization Research Unit (CIORU) 90-04, Carleton University, Department of Economics.
- Chang, Myong-Hun, 1991. "The effects of product differentiation on collusive pricing," International Journal of Industrial Organization, Elsevier, vol. 9(3), pages 453-469, September.
- Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
- Deneckere, R., 1983. "Duopoly supergames with product differentiation," Economics Letters, Elsevier, vol. 11(1-2), pages 37-42.
- Lambertini, Luca, 1997.
"Prisoners' Dilemma in Duopoly (Super)Games,"
Journal of Economic Theory,
Elsevier, vol. 77(1), pages 181-191, November.
- L. Lambertini, 1996. "Prisoners` Dilemma in Duopoly Supergames," Working Papers 264, Dipartimento Scienze Economiche, Universita' di Bologna.
- Luca Lambertini, 1997. "Prisoners’ Dilemma in Duopoly (Super)games," CIE Discussion Papers 1997-08, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
- Lambertini, Luca & Schultz, Christian, 2003.
"Price or quantity in tacit collusion?,"
Elsevier, vol. 78(1), pages 131-137, January.
- 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.
- Compte, Olivier & Jenny, Frederic & Rey, Patrick, 2002. "Capacity constraints, mergers and collusion," European Economic Review, Elsevier, vol. 46(1), pages 1-29, January.
- Rothschild, R., 1992. "On the sustainability of collusion in differentiated duopolies," Economics Letters, Elsevier, vol. 40(1), pages 33-37, September.
- Macleod, W.B., 1984.
"A theory of conscious parallelism,"
CORE Discussion Papers
1984040, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- William A. Brock & José A. Scheinkman, 1985. "Price Setting Supergames with Capacity Constraints," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 371-382.
- Carl Davidson & Raymond Deneckere, 1984.
"Excess Capacity and Collusion,"
675, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- R.Rothschild, "undated".
"Sustaining Collusion When the Choice of Strategic Variable is Endogenous,"
ec3/93, Department of Economics, University of Lancaster.
- Rothschild, R., 1995. "Sustaining collusion when the choice of strategic variable is endogenous," Journal of Economic Behavior & Organization, Elsevier, vol. 28(3), pages 373-385, December.
- Luca Lambertini & Dan Sasaki, 1999. "Optimal punishments in linear duopoly supergames with product differentiation," Journal of Economics, Springer, vol. 69(2), pages 173-188, June.
- Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-554, May.
- Lambertini, L. & Sasaki, D., 1998.
"Non-Negative Quantity Constraints and the Duration of Punishment,"
Department of Economics - Working Papers Series
630, The University of Melbourne.
- Luca Lambertini & Dan Sasaki, 2002. "Non-Negative Quantity Constraints and the Duration of Punishment," The Japanese Economic Review, Japanese Economic Association, vol. 53(1), pages 77-93.
- Majerus, David W., 1988. "Price vs. quantity competition in oligopoly supergames," Economics Letters, Elsevier, vol. 27(3), pages 293-297.
- L. Lambertini & C. Schultz, 2000. "Price vs Quantity in a Repeated Differentiated Duopoly," Working Papers 379, Dipartimento Scienze Economiche, Universita' di Bologna.
- Chang, Myong-Hun, 1992. "Intertemporal Product Choice and Its Effects on Collusive Firm Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(4), pages 773-793, November.
- Hackner, Jonas, 1996. "Optimal symmetric punishments in a Bertrand differentiated products duopoly," International Journal of Industrial Organization, Elsevier, vol. 14(5), pages 611-630, July.
- Albaek, Svend & Lambertini, Luca, 1998. "Collusion in differentiated duopolies revisited," Economics Letters, Elsevier, vol. 59(3), pages 305-308, June.
- Jean-Pierre Benoit & Vijay Krishna, 1987. "Dynamic Duopoly: Prices and Quantities," Review of Economic Studies, Oxford University Press, vol. 54(1), pages 23-35.
When requesting a correction, please mention this item's handle: RePEc:eee:reecon:v:60:y:2006:i:3:p:121-130. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.