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Price and Quantity Competition in a Differentiated Duopoly

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  • Nirvikar Singh
  • Xavier Vives

Abstract

This article analyzes the duality of prices and quantities in a differentiated duopoly. It is shown that if firms can only make two types of binding contracts with consumers, the price contract and the quantity contract, it is a dominant strategy for each firm to choose the quantity (price) contract, provided the goods are substitutes (complements).

Suggested Citation

  • 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.
    • Handle: RePEc:rje:randje:v:15:y:1984:i:winter:p:546-554
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