Intra-industry trade with Bertrand and Cournot oligopoly: The role of endogenous horizontal product differentiation

James Brander and Barbara Spencer

Research in Economics, 2015, vol. 69, issue 2, 157-165

Abstract: This paper investigates the effect of endogenous horizontal product differentiation on trade patterns and the gains from trade under Bertrand and Cournot oligopoly. If trade occurs, Bertrand firms always differentiate their products more that Cournot firms. However, sufficiently high differentiation costs can prevent product differentiation. Trade in homogeneous products never takes place under Bertrand competition. Bertrand firms will either differentiate their products or will not export. Cournot firms, however, may trade in either homogeneous or differentiated products. Product differentiation can significantly increase the gains from trade under both Cournot and Bertrand oligopoly.

Keywords: Bertrand; Cournot; Product differentiation; Intra-industry trade; Gains from trade (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1090944315000113
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Intra-Industry Trade with Bertrand and Cournot Oligopoly: The Role of Endogenous Horizontal Product Differentiation (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:69:y:2015:i:2:p:157-165

DOI: 10.1016/j.rie.2015.02.007

Access Statistics for this article

Research in Economics is currently edited by Federico Etro

More articles in Research in Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().