Intra-brand competition in a differentiated oligopoly

Michèle Breton () and Lucia Sbragia ()
Additional contact information
Michèle Breton: HEC Montréal
Lucia Sbragia: Durham University Business School

Journal of Economics, 2021, vol. 132, issue 1, No 1, 40 pages

Abstract: Abstract In this paper we consider a differentiated oligopoly with two product varieties that are supplied by two groups of firms. After computing the Cournot solution of the game, we study its sensitivity to different sources of competition, namely the degree of product substitutability and market composition. Market composition can change either via new firms entering one industry or via firms switching production techniques, thus modifying the intensity of intra-brand competition. After studying the welfare consequences of an intensification of competition, we identify the equilibrium market composition when firms are driven by profit considerations. All the results are expressed in terms of the degree of product substitutability and of what we define “weighted relative efficiency” (WRE), which is a parameter combining both firm characteristics and market conditions.

Keywords: Differentiated oligopoly; Cournot solution; Intra-brand competition; Equilibrium (search for similar items in EconPapers)
JEL-codes: C72 L13 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s00712-020-00712-w Abstract (text/html)

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:kap:jeczfn:v:132:y:2021:i:1:d:10.1007_s00712-020-00712-w

DOI: 10.1007/s00712-020-00712-w

Access Statistics for this article

Journal of Economics is currently edited by Giacomo Corneo

More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().