We consider the following stage game : a domestic government chooses an import quota, then a domestic and a foreign firm choose their quality level before engaging a price competition. We first show that the indirect effect of the quota on the sales of the domestic producer are different...

For Bertrand duopoly with linear costs, we establish via a single counterexample that: (i) A new monotone transformation of the firms' profit functions may lead to the supermodularity of transformed profits when the standard log and identity transformations both fail, and (ii) Topkis's notion of...

A general notion of market perfect contestability is introduced. It coincides with the definition given by Baumol et al. under Bertrand competition, but is compatible with other forms of competition : Cournot competition as well as monopolistic competition. Using this notion, we illustrate the...

This paper shows that the adoption of flexible manufacturing techniques by firms leads to a tougher price regime. This need not benefit consumers since the tougher regime deters entry and facilitates segmented market structures. The ability of flexible manufacturing to deter entry is moderated...

We provide an extensive and general investigation of the effecst on industry performance - profits, social welfare and price-cost margins - of exogenously changing the number of firms in Cournot markets. This includes an in-depth exploration of the well-known trade-off between competition and...

We analyze the principle of comparative advantage when agents in the world market are aware of the influence their individual supply exerts on the equilibrium exchange rate of goods. We show that specialization following comparative disadvantage can be an oligopoly equilibrium in a Ricardian...

This note analyzes the effect of product complementarity in a bilateral oligopoly. We show that offers of traders on the two sides of the market are strategic complements (substitutes) if and only if the two goods are substitutes (complements). The outcome of the bilateral oligopoly game...

In the framework of symmetric Cournot oligopoly, this paper provides two minimal sets of assumptions on the demand and cost functions that imply respectively that, as the number of firms increases, the minimal and maximal equilibria lead to (i) decreasing industry price and increasing or...

A model of duopoly competition in nonlinear pricing when firms are imperfectly informed about consumer locations is analyzed. A continuum of consumers purchase a variable amount of a product from one of two firms located at the endpoints of the market. At the Nash equilibrium in quantity-outlay...

In view of the uncertainty over the ability of merging firms to achieve efficiency gains, we model the post-merger situation as a Cournot oligopoly wherein the outsiders face uncertainty about the merged entity's final cost. At the Bayesian equilibrium, a bilateral merger is profitable provided...