Both quality differentiation and capacity commitment have been shown to relax price competition. However, their joint influence on the outcome of price competition has not yet been assessed. In this article, we consider a three stage game in which firms choose quality, then commit to capacity...

We show in a simple model of entry with sunk cost, that a regulator prefers limiting the output, or capacity, of the incumbent firm rather than imposing a "Minimum Quality Standard" in order to help the entrant to provide high quality. As a by-product, our analysis makes a contribution to the...

Quotas act as facilitating practices under price competition. Because they relax price competition, they may affect firms' quality choice in very specific ways. We analyze this issue by considering the following stage game: a domestic government chooses an import quota, then a domestic and a...

We study duopoly competition between a domestic and a foreign firm who first choose their quality and then compete in prices in the domestic market. As is well known, the free-trade equilibrium exhibits quality differentiation and indeterminacy of the quality leader. We show that an import quota...

In this note, we consider a Bertrand-Edgeworth duopoly model in which products are differentiated â€à la Hotellingâ€. We assumine that only one of the two firms faces a capacity constraint. For this particular case, we characterize the equilibrium payoff of the unconstrained firm for the...