Please use this identifier to cite or link to this item:
http://hdl.handle.net/10174/37227
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Title: | Market configurations when marginal costs are quality‐dependent |
Authors: | Pires, C.P. Jorge, S.F. Catalão-Lopes, M. Pinho, J. Garcês, P. Alventosa, A. |
Keywords: | Endogenous market configurations Quality-then-price game Qaulity dependent marginal costs Subgame perfect Nash equilibrium |
Issue Date: | 2024 |
Publisher: | Wiley |
Abstract: | Most quality-then-price decision models under vertical product differentiation con-sider a predetermined market configuration. We endogenize market configuration considering quality-dependent marginal costs and conclude that a strictly interior full coverage duopoly holds for some parameter values, unveiling the relevance of this commonly assumed market structure. Moreover, we show that a monopoly never arises in equilibrium, and (i) there are multiple equilibria at the frontier between inte-rior and corner full coverage duopoly, (ii) the market is fully (partially) covered when relative tastes' heterogeneity is low (high), and (iii) there is a discontinuity in the tran-sition from partial coverage to full coverage duopoly. |
URI: | http://hdl.handle.net/10174/37227 |
Type: | article |
Appears in Collections: | CEFAGE - Publicações - Artigos em Revistas Internacionais Com Arbitragem Científica
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