We model a vertically differentiated duopoly with quantity-setting firms as an extended game in which firms noncooperatively choose the timing of moves at the quality stage, to show that at the subgame perfect equilibrium sequential play obtains, with the low-quality firm taking the leader's role.
Low-quality leadership in a vertically differentiated duopoly with Cournot competition / Lambertini, Luca; Tampieri, Alessandro. - In: ECONOMICS LETTERS. - ISSN 0165-1765. - STAMPA. - 115:(2012), pp. 396-398. [10.1016/j.econlet.2011.12.096]
Low-quality leadership in a vertically differentiated duopoly with Cournot competition
TAMPIERI, ALESSANDRO
2012
Abstract
We model a vertically differentiated duopoly with quantity-setting firms as an extended game in which firms noncooperatively choose the timing of moves at the quality stage, to show that at the subgame perfect equilibrium sequential play obtains, with the low-quality firm taking the leader's role.
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