Market Coverage and the Existence of Equilibrium in a Vertically Differentiated Duopoly

Lambertini, Luca ; Ecchia, Giulio (1998) Market Coverage and the Existence of Equilibrium in a Vertically Differentiated Duopoly. Bologna: Dipartimento di Scienze economiche DSE, p. 10. DOI 10.6092/unibo/amsacta/4997. In: Quaderni - Working Paper DSE (311). ISSN 2282-6483.
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Abstract

The existence of a pure-strategy subgame perfect equilibrium in qualities and prices is investigated in a duopoly model of vertical differentiation where quality improvements require a quadratic variable cost. The alternative cases of partial and full market coverage are considered. It is shown that there exists a parameter range where the incentive to decrease differentiation arises for the high-quality firm, preventing firms to reach a pure-strategy duopoly equilibrium.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Ecchia, Giulio
Keywords
equilibrium existence, vertical differentiation, market coverage
Subjects
ISSN
2282-6483
DOI
Deposit date
30 Mar 2016 10:31
Last modified
30 Mar 2016 10:31
URI

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