A Note on Price and Quantity Competition in Differentiated Oligopolies
In this not we show that the results developed in Singh and Vives (1984) are sensitive to the duopoly assumtion (Rand Journal of Economics 15, 546-554). If there are more than two firms, prices may be higher under price competition than unde quantity competition. This will be the case if quality differences are large and goods are complements. If goods are substitutes, high-quality fims may earn higher profits unde price competion than under quantity competition. Hence, it is not evident which kind of competition is more efficient.
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|Date of creation:||17 Aug 1999|
|Publication status:||Published in Journal of Economic Theory, 2000, pages 233-239.|
|Contact details of provider:|| Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden|
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- 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.
- 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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