Product Differentiation Impact on Games Theory Models

Ciprian Rusescu () and Mihai Daniel Roman ()
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Ciprian Rusescu: Bucharest University of Economic Studies
Mihai Daniel Roman: Bucharest University of Economic Studies

Ovidius University Annals, Economic Sciences Series, 2020, vol. XX, issue 2, 500-508

Abstract: Imperfect competition represents one of the main topic of modern economic analysis and it can be easily identified in the current economic climate. Whether we are reffering to the aggregate economic field or to a specific industry, certain topics can be highlighted due to their strong impact on the market analyse tools selection process: the differences between price and quantity competition scenario, competitors movement timing in a duopoly game, the role of product differentiation in determining market output/price levels or the presence of the market hierarchical structure. In order to better expolore the impact of previously mentioned concepts in a duopoly market, our present paper considers a consistent framework, making use of a product differentiation base model. We are discussing the market outcomes under quantity and price competition (Cournot & Bertrand simultaneous moves scenarios) but also sequential moves output competition (Stackelberg duopoly). We are also presenting a numerical simulation analyze that can be efficiently used to explore the model properties under the assumption of products differentiation degree variation. The models utilize both numerical and graphical presentation.

Keywords: Stackelberg equilibrium; Stackelberg model; Cournot model; oligopoly; stability (search for similar items in EconPapers)
JEL-codes: C72 D01 D43 L13 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xx:y:2020:i:2:p:500-508

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