Price leadership in a vertically differentiated market

Youping Li

Economic Modelling, 2014, vol. 38, issue C, 67-70

Abstract: This paper compares the equilibrium outcomes under simultaneous and sequential price settings in a vertically differentiated market. When the timing of the price game is determined endogenously, it is shown that the sequential play with the high quality firm leading emerges, yielding the highest industry profit but the lowest social welfare among the different timings.

Keywords: Vertical differentiation; Price leadership; Endogenous timing; Welfare (search for similar items in EconPapers)
JEL-codes: C7 D4 L1 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:38:y:2014:i:c:p:67-70

DOI: 10.1016/j.econmod.2013.12.005

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