Two firms produce different qualities at possibly different, constant marginal costs. They compete in quantities on a market where buyers only observe the average quality supplied. The model is a generalization of the standard Cournot duopoly, which corresponds to the special case where the two...

We study an asymmetric information model in which two firms are active on a market where buyers only observe the average quality supplied. Quantities and cost structures are exogenously given and firms compete in quality. Before choosing their qualities, they bargain over a perfectly enforcable...

It is increasingly observable that in different industries competitors jointly acquire and share customer data. We propose a modified Hotelling model with two-dimensional consumer heterogeneity to analyze the incentives for such agreements and their welfare implications. In our model the...

Theoretically and experimentally, we generalize the analysis of acquiringa company (Samuelson and Bazerman 1985) by allowing for competition ofboth, buyers and sellers. Naivety of both is related to the idea that higherprices exclude worse qualities. While competition of naive buyers...

It is increasingly observable that competitors in different industries share customer data, which can be used for targeted pricing. We propose a modified Hotelling model with two-dimensional consumer heterogeneity to analyze the incentives for such sharing and its ensuing welfare effects. We...

It is increasingly observable that in different industries competitors jointly acquire and share customer data. We propose a modified Hotelling model with two-dimensional consumer heterogeneity to analyze the incentives for such agreements and their welfare implications. In our model the...

Firms signal high quality through high prices even if the market structure is highly competitive and price competition is severe. In a symmetric Bertrand oligopoly where products may differ only in their quality, production cost is increasing in quality and the quality of each firm’s product...

We consider an oligopolistic market where firms compete in price and quality and where consumers are heterogeneous in knowledge: some consumers know both the prices and quality of the products offered, some know only the prices and some know neither. We show that two types of signalling...

Do firms under relative payoffs maximizing (RPM) behavior always choose a strategy profile that results in tougher competition compared to firms under absolute payoffs maximizing (APM) behavior? In this paper we will address this issue through a simple model of symmetric oligopoly where firms...

In a two-firm model where each firm sells a high-quality and a low-quality version of a product, customers differ with respect to their brand preferences and their attitudes towards quality. We show that the standard result of quality-independent markups crucially depends on the assumption that...