Choice of Product Type by Strategically Interdependent Firms

J M Alec Gee

Scottish Journal of Political Economy, 1996, vol. 43, issue 2, 159-76

Abstract: This paper analyzes the degree of product differentiation between cooperative and noncooperative firms in Nash market equilibria. The basic model is an 'address' model and the firms' strategic variables are product type and price. Profits are taken to be an increasing function of the degree of product differentiation between firms. When all firms are noncooperative, product gaps between equilibrium firms are equal; but tacit collusion results in product gap variation between firms. Copyright 1996 by Scottish Economic Society.

Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:43:y:1996:i:2:p:159-76

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Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith

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