The Cournot-Bertrand Profit Differential in a Differentiated Duopoly with Unions and Labour Decreasing Returns
This paper compares Cournot and Bertrand equilibria in a differentiated duopoly (with imperfect substitutes), total wage bill maximizing unions and labour decreasing returns. It is shown that the standard result, that equilibrium profits are always higher under Cournot, may be reversed even for a fairly low degree of product differentiation. Moreover, the presence of labour decreasing returns tends to reinforce the mechanisms that contribute to the reversal result, making this event possible for a wider range of situations, with respect to those identified by the earlier literature.
|Date of creation:||Jan 2010|
|Contact details of provider:|| Postal: Via Patara, 3, 47921 Rimini (RN)|
Web page: http://rcea.org
More information through EDIRC
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.:
- Lopez, Monica Correa & Naylor, Robin A., 2004. "The Cournot-Bertrand profit differential: A reversal result in a differentiated duopoly with wage bargaining," European Economic Review, Elsevier, vol. 48(3), pages 681-696, June.
When requesting a correction, please mention this item's handle: RePEc:rim:rimwps:36_10. 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: (Marco Savioli)
If references are entirely missing, you can add them using this form.