A Note on Cost-Reducing Alliances in Vertically Differentiated Oligopoly

Frédéric Deroïan ()

Economics Bulletin, 2004, vol. 12, issue 11, 1-6

Abstract: In a vertically differentiated oligopoly, firms raise cost-reducing alliances before competing with each other. It is shown that heterogeneity in quality and in cost functions reduces individual incentives to form links. Furthermore, both differentiated Cournot and Bertrand competition qualitatively similar incitations to form alliances.

JEL-codes: L1 L2 (search for similar items in EconPapers)
Date: 2004-12-23
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Working Paper: A Note on Cost-reducing Alliances in Vertically Differentiated Oligopoly (2004)
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