This paper considers the effects of entry in the final goods market when the input market is imperfectly competitive. We show that entry of a new firm may increase profit of the incumbent if the technology of the entrant is sufficiently inferior to that of the incumbent...

This paper shows that if number of firms is determined endogenously, Cournot competition generates higher welfare compared to Bertrand competition when products are sufficiently differentiated. If products are close substitutes, welfare is higher under Bertrand competition. We show that the...