Low-quality leadership in a vertically differentiated duopoly with Cournot competition

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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Year of publication:	2012
Authors:	Lambertini, Luca ; Tampieri, Alessandro
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 115.2012, 3, p. 396-398
Publisher:	Elsevier
Subject:	Endogenous timing \| Product quality \| Sequential play

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Type of publication:	Article
Classification:	C73 - Stochastic and Dynamic Games ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

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