Quantity versus price competitions in a vertical relationship with separate downstream markets

Aika Monden (), Shuhei Takezawa () and Tomomichi Mizuno ()
Additional contact information
Aika Monden: Kyoto University
Shuhei Takezawa: Osaka University
Tomomichi Mizuno: Kobe University

Economics Bulletin, 2025, vol. 45, issue 3, 1620 - 1629

Abstract: Contrary to conventional wisdom, our analysis of vertical relationships involving two independent downstream markets challenges the notion that Bertrand competition yields lower profits than Cournot competition. We show that if one downstream market in which two firms compete on either quantity or price is smaller than the other downstream market, then the input price under Bertrand competition is lower than under Cournot competition. This can lead to higher profits for downstream firms under Bertrand competition.

Keywords: Cournot competition; Bertrand competition; vertical relationship; separate downstream market (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2025-09-30
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I3-P141.pdf (application/pdf)

Related works:
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:ebl:ecbull:eb-24-00513

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().