Price vs Quantity in a Duopoly Supergame with Nash Punishments

S. Baldelli and Luca Lambertini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We examine the endogenous choice between price and quantity behaviour in a duopoly supergame with product differentiation. We find that (i) if cartel profits are evenly split between firms, then only symmetric equilibria obtains; (i) if instead the additional profits available through collusion are split according to the Nash bargaining solution, there are parameter regions where all subgame perfect equilibria are asymmetric, with firms colluding in price-quantity supergames.

Date: 2004
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Related works:
Journal Article: Price vs quantity in a duopoly supergame with Nash punishments (2006)
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