In a recent paper, Alipranti et al. (2014, Price vs. quantity competition in a vertically related market, Economics … Letters, 124: 122-126) show that in a vertically related market Cournot competition yields higher social welfare compared to … Bertrand competition if the upstream firm subsidises the quantity setting downstream firm's production via negative wholesale …

This paper shows the possibility of higher welfare under Cournot competition in an asymmetric cost duopoly when the … higher under Cournot competition compared to Bertrand competition when the initial cost difference of these firms is moderate …; but, for very small or very large cost initial cost differences, welfare is higher under Bertrand competition. If …