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 socially efficient.
Would You Like to Enter First with a Low-Quality Good? / L. Lambertini; P. Tedeschi. - In: BULLETIN OF ECONOMIC RESEARCH. - ISSN 0307-3378. - STAMPA. - 59:3(2007), pp. 269-282. [10.1111/j.0307-3378.2007.00262.x]
Would You Like to Enter First with a Low-Quality Good?
LAMBERTINI, LUCA;
2007
Abstract
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 socially efficient.File in questo prodotto:
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