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We consider a simple Stackelberg model with demand uncertainty only for the first mover in order to compare the advantages of leadership and flexibility, and use an example to provide some discussion about the endogenous order of moves in the presence of demand uncertainty. We find that only...
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Cartels may be exempted from competition law if they sufficiently promote sustainability objectives. To qualify, the collusive agreement should not fully eliminate competition. We study how remaining and fringe competition affect incentives to produce more sustainably under semi-collusion in an...
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We revisit the relationships between competition and market outcomes in a Stackelberg oligopoly. Consider a …
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This paper investigates the preference for the Stackelberg leader/follower roles in a mixed duopoly, where a welfare-maximizing public firm competes with a profit-maximizing private firm. In contrast to the well known relationship in a private duopoly, we demonstrate that if a firm's reaction...
Persistent link: https://www.econbiz.de/10013128049
Quality competition, by increasing sunk costs, may produce levels of concentration even higher than expected in its absence. Based on Sutton's model of endogenous sunk costs and quality competition, we show that consumers, under certain conditions, may benefit from higher industry concentration...
Persistent link: https://www.econbiz.de/10013131532
We study the duopoly exit equilibrium in a multimarket environment with declining demand, and investigate the roles of strategic merger, agency cost, and collusion in a multimarket exit game.Cross-market spillovers with endogenous duration and the strategic merger of outside firms can serve as...
Persistent link: https://www.econbiz.de/10012968283
Negative advertising provides information about the weaknesses of a competitor’s product. We study negative advertising with a focus on how it impacts product positioning for profit-maximizing firms. We build a model of informative advertising competition, where product positioning is...
Persistent link: https://www.econbiz.de/10013211404