Price vs. quantity competition in vertically related markets. Generalization

Olga Rozanova

Economics Letters, 2015, vol. 135, issue C, 92-95

Abstract: This paper generalizes the result of Alipranti et al. (2014) regarding the wholesale prices: I prove that upstream firms always charge the wholesale prices above (below) their marginal costs in case of Bertrand (Cournot) competition downstream. Alipranti et al. (2014) demonstrates this result for the case of linear demand functions and monopolist that sells its product to two retailers. I relax the assumption of linear demands, allow for arbitrary number of retailers and for the competition upstream.

Keywords: Vertical relations; Price competition; Quantity competition (search for similar items in EconPapers)
JEL-codes: D43 L13 L14 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:135:y:2015:i:c:p:92-95

DOI: 10.1016/j.econlet.2015.08.007

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