Models of strategic interaction in quantities vs. prices with differentiated goods

Quyen Nguyen and John Gilbert

International Review of Economics Education, 2019, vol. 30, issue C, -

Abstract: Two important topics in industrial organization are the difference between quantity and price competition in oligopoly, and the role of product differentiation in determining market outcomes. We consider a consistent framework in which these issues can be explored, using a base model of product differentiation. We consider the properties of the market outcomes under price and quantity competition, with both simultaneous and sequential moves. We then present a series of numerical simulation models that can be used to efficiently explore the model properties under various assumptions. The models are built in Excel, and utilize both numerical and graphical presentations. They are suitable for classroom use in presentations, and in directed student assignments. We discuss a number of exercises, and our experiences with using the models in a number of different course contexts.

Keywords: Excel; Numerical models; Competition in quantities; Competition in prices (search for similar items in EconPapers)
JEL-codes: A22 C63 D43 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ireced:v:30:y:2019:i:c:11

DOI: 10.1016/j.iree.2018.08.002

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