We provide sufficient conditions in finite-horizon multi-stage games for the value function of each player, associated to extremal Markov perfect equilibria, to display strategic complementarities and for the contemporaneous equilibrium to be increasing in the state variables.

We study the equilibrium with the quantity setting behavior and price setting behavior of firms in a duopoly under relative profit maximization with constant conjectural variations, and arrive at the following results. 1) Conjectural variations of firms are irrelevant to the equilibrium of a...

Duopoly competition can take different forms: Bertrand, Cournot, Bertrand-Stackelberg, Cournot-Stackelberg and joint profit maximization. In this paper we find a clear price ranking among these five markets when goods are substitutes and an output ranking when goods are complements. Moreover,...

This paper uses data from Taiwan'S banking sector to investigate whether state-owned banks can serve as an internal regulation mechanism to sustain market competition. In contrast to the traditional second-best literature, the evidence shows that a certain degree of market coordination exists in...

We study competitive price setting behavior in the Dutch mortgage market, using daily observations on advertised 5- and 10-year mortgage interest rates for a sample of the four largest Dutch banks. We (1) estimate a VECM model, (2) a discrete choice model and (3) a structural conjectural...

Duopoly competition can take different forms: Bertrand, Cournot, Bertrand-Stackelberg, Cournot-Stackelberg and joint profit maximization. In comparing these market structures this paper make three contributions. First, we find a clear price (output) ranking among these five markets when goods...

When goods are substitutes (complements), we find a clear price (output) ranking across five duopoly markets, namely Cournot, Bertrand, Cournot-Stackelberg, Bertrand-Stackelberg, and joint profit maximization. We explain these rankings in terms of levels of conjectural variation.

I examine how ex ante symmetric firms that compete in prices strategically decide to invest in research and development of cost-reducing technology when the rival firm and the consumers are not aware of the actual outcome of the investment. I also compare the strategic incentive to invest and...

We investigate the timing and the valuation of strategic investment aimed at enhancing entry opportunities in related market segments. As demand is uncertain, entry options should be exercised at the optimal time, trading off the market share gain against the option to wait until more...