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Dynamic entry in vertically differentiated markets

Auer, Raphael A.; Sauré, Philip - 2016

We develop a model of vertical innovation in which firms incur a market entry cost and choose a unique level of quality. Once established, firms compete for market shares, selling to consumers with heterogeneous tastes for quality. The equilibrium of the pricing game exists and is unique within...

Persistent link: https://www.econbiz.de/10011547909

Vertical integration and downstream collusion

Biancini, Sara; Ettinger, David - 2016

We investigate the effect of a vertical merger on downstream firms' ability to collude in a repeated game framework. We show that a vertical merger has two main effects. On the one hand, it increases the total collusive profits, increasing the stakes of collusion. On the other hand, it creates...

Persistent link: https://www.econbiz.de/10011482885

Why firms should care for all consumers

Planer-Friedrich, Lisa; Sahm, Marco - 2016

We compare the strategic potential of Corporate Social Responsibility (CSR) and Customer Orientation (CO) as commitments to larger quantities in Cournot competition, modeled as a multi-stage game. First, in addition to profits, firms can choose to care for the surplus of either all consumers...

Persistent link: https://www.econbiz.de/10011539203

The limited liability effect in experimental duopoly markets

Oechssler, Joerg; Schuhmacher, Frank - 2001

effects on product market competition. We test their model in a duopoly experiment under both, Bertrand and Cournot … competition. We find that leverage has strategic effects, but those effects are much weaker than predicted by theory. Specifically … predicted by theory. It appears that subjects recognize the strategic effects of their own debt. However, they do not (want to …

Persistent link: https://www.econbiz.de/10011539878

Network effects, compatibility decisions, and monopolization

Woeckener, Bernd - 1998

This paper analyzes the compatibility decision of a dominant hardware supplier. There are two substitutive variants of the hardware component of a hardware-software system, they are horizontally differentiated, and one of the two has a quality advantage. Among other things, we show under what...

Persistent link: https://www.econbiz.de/10010407083

Relative profit maximization and Bertrand equilibrium with convex cost functions

Satoh, Atsuhiro; Tanaka, Yasuhito - 2014

This study derives pure strategy Bertrand equilibria in a duopoly in which two firms produce a homogeneous good with …

Persistent link: https://www.econbiz.de/10010420037

The influence of product liability on vertical product differentiation

Baumann, Florian; Friehe, Tim; Rasch, Alexander - 2015

This paper explores the impact of product liability on vertical product differentiation when product safety is perfectly observable. In a two-stage competition, duopolistic firms are subject to strict liability and segment the market such that a low-safety product is marketed at a low price to...

Persistent link: https://www.econbiz.de/10010507682

Deciding about (de-)centralization of industrial policy : delegation by a central authority vs. bargaining of regional governments

Morasch, Karl - 2003

power on a case by case basis to a central authority. The analysis is performed in an integrated Cournot duopoly with …

Persistent link: https://www.econbiz.de/10010509330

Electronic coordination in oligopolistic markets : impact on transport costs and product differentiation

Bandulet, Martin; Morasch, Karl - 2002

duopoly where firms compete in two spatially separated markets. We show that firms always have nonnegative incentives to … elektronische Koordination und in verstärkte Produktdifferenzierung in einem Duopol mit räumlich getrennten Märkten. Wir zeigen …

Persistent link: https://www.econbiz.de/10010509336

The influence of product liability on vertical product differentiation

Baumann, Florian; Friehe, Tim; Rasch, Alexander - 2015

Persistent link: https://www.econbiz.de/10010509593