Arbeitspapier
Existence of Equilibrium in A Differentiated Duopoly With Network Externalities
The existence of a pure-strategy subgame perfect equilibrium in qualities and prices is investigated in a duopoly model of vertical differentiation where quality improvements require a quadratic variable cost and network externalities appears in consumer utility. Full market coverage is assumed. We show that the incentive to predate prevents firms to reach a pure strategy noncooperative equilibrium with prices above marginal costs. If network externalities are sufficiently large, a Bertrand equilibrium with zero profits may arise, although the amount of product differentiation is strictly positive. If the weight of network externalities exceeds that of hedonic satisfaction in consumer preferences, then predation is always a dominant strategy.
- Language
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Englisch
- Bibliographic citation
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Series: Quaderni - Working Paper DSE ; No. 333
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Lambertini, Luca
Orsini, Raimondello
- Event
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Veröffentlichung
- (who)
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Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
- (where)
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Bologna
- (when)
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1998
- DOI
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doi:10.6092/unibo/amsacta/4976
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Lambertini, Luca
- Orsini, Raimondello
- Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Time of origin
- 1998
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Low-Quality Leadership in a Vertically Differentiated Duopoly with Cournot Competition
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Market Coverage and the Existence of Equilibrium in a Vertically Differentiated Duopoly
Endogenous timing and the choice of quality in a vertically differentiated duopoly
Sequential Entry in a Vertically Differentiated Duopoly
Price vs Quantity in a Repeated Differentiated Duopoly
Prisoners' Dilemma in Duopoly Supergames
Dynamic Duopoly with Vertical Differentiation
Low-Quality Leadership in a Vertically Differentiated Duopoly with Cournot Competition
CSR in an Asymmetric Duopoly with Environmental Externalities
Dynamic Hotelling Duopoly with Linear Transportation Costs
Optimal Fiscal Regime in a Spatial Duopoly
Sequential Vs Simultaneous Equilibria in A Differentiated Duopoly
Choosing Roles in a Duopoly for Endogenously Differentiated Products
Market Coverage and the Existence of Equilibrium in a Vertically Differentiated Duopoly
Endogenous timing and the choice of quality in a vertically differentiated duopoly
Sequential Entry in a Vertically Differentiated Duopoly
Price vs Quantity in a Repeated Differentiated Duopoly
Prisoners' Dilemma in Duopoly Supergames
Dynamic Duopoly with Vertical Differentiation
Low-Quality Leadership in a Vertically Differentiated Duopoly with Cournot Competition
CSR in an Asymmetric Duopoly with Environmental Externalities
Dynamic Hotelling Duopoly with Linear Transportation Costs