In this paper, we show that, contrarily to the conclusions obtained by Cremer and Thisse (1991), the equilibrium emerging from a model of vertical product differentiation does not yield maximum differentiation because of the strtegic complementarity between products in the quality space.

The endogenous choice between two alternative kinds of product differentiation is addressed in a duopoly model where firms are free to locate along the real axis, while consumers are distributed along a linear city of finite length. It turns out that the nature of differentiation may be heavily...

Two monopolists operate in two countries which differ only for their per capita income. Each firm sells a single product which is vertically differentiated. If trade opens, the firm operating in the poorer country starts to export to the richer. This might induce the government of the richer...

The effects of the delegation of control to managers are investigated in a duopolistic market for differentiated goods. It appears that delegation is profitable to shareholders under Cournot competiton, provided that the rival firm maximizes profit.

The choice of the roles by firms in a differentiated duopoly is analysed, under both the assumption of full and non full market coverage. Under the first, it turns out that, due to the endogeneity of product differentiation, both firms would prefer to be price leader, contrarily to the results...

The consequences of free trade in an international spatial duopoly are investigated, under different market regimes. The optimal setting for both countries appears to be a private duopoly in which both firms operate under the same fiscal regime and a side payment from the larger to the smaller...

Extending the analysis carried out in Lambertini (1993), we investigate a horizontally differentiated duopoly in which a public authority can either tax or subsidize firms, in order to induce duopolists to choose the socially optimal locations.

The effect of delegation on cartel stability is addressed in a duopoly for a homogeneous product, under Cournot competition. The main findings are that if only one firm is managerial, the critical discount factor is increased by the presence of a weight attached to sales, so that cartel...

In a spatial competition model, changes in firms' competitive behaviour may occur when the hypothesis that individual gross surplus is positive in equilibrium is relaxed. We prove that there exists a region of the relevant parameter where firms' behaviour mimics collusion, while in another range...

The stability of collusion is analysed for a family of demand functions whose curvature is determined by a parameter varying between zero and infinity. If demand is sufficiently convex, firms may prefer to act as quantity setters in order to increase cartel stability. Otherwise, price-setting...