Would you like to enter first with a low-quality good?

Using a two-period duopoly model with vertical differentiation, we show that there exists a unique subgame perfect equilibrium where the first entrant supplies a lower quality and gains higher profits than the second entrant. We also prove that this entry sequence is also socially efficient.

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Year of publication:	2003
Authors:	Lambertini, Luca ; Tedeschi, Piero
Publisher:	Bologna : Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)

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Series:	Quaderni - Working Paper DSE ; 494
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.6092/unibo/amsacta/4800 [DOI] hdl:10419/159335 [Handle] RePEc:bol:bodewp:494 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10011651388