Codetermination and product differentiation

Luciano Fanti, Luca Gori () and Mauro Sodini

International Review of Economics & Finance, 2018, vol. 58, issue C, 390-403

Abstract: This research revisits the theoretical literature on codetermination in differentiated Cournot duopoly markets. Although codetermination is widely adopted in some north European countries, the theoretical analysis is restricted to a few number of works. The literature is led by Kraft (1998), who shows that codetermination emerges as a market outcome (sub-optimal Nash equilibrium) in a quantity-setting duopoly with homogeneous products. However, there exists evidence that codetermination is quite absent in countries where there are no specific laws. This article shows that codetermination cannot emerge as a Nash equilibrium when products are sufficiently differentiated (even when they are complementary). These results also holds by considering R&D activities.

Keywords: Codetermination; Differentiated duopoly; Quantity competition (search for similar items in EconPapers)
JEL-codes: D43 J53 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:58:y:2018:i:c:p:390-403

DOI: 10.1016/j.iref.2018.05.001

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