Price leadership in a vertically differentiated market

This paper compares the equilibrium outcomes under simultaneous and sequential price settings in a vertically differentiated market. When the timing of the price game is determined endogenously, it is shown that the sequential play with the high quality firm leading emerges, yielding the highest industry profit but the lowest social welfare among the different timings.

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Year of publication:	2014
Authors:	Li, Youping
Published in:	Economic Modelling. - Elsevier, ISSN 0264-9993. - Vol. 38.2014, C, p. 67-70
Publisher:	Elsevier
Subject:	Vertical differentiation \| Price leadership \| Endogenous timing \| Welfare

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Type of publication:	Article
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; D4 - Market Structure and Pricing ; C7 - Game Theory and Bargaining Theory
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010753353