Second-Mover Advantage and Price Leadership in Bertrand Duopoly

Rabah Amir () and Anna Stepanova
Additional contact information
Anna Stepanova: University of Southern Denmark, Odense
Authors registered in the RePEc Author Service: Anna Cartwright

No 2000-10, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: We consider the issues of endogenous timing and first versus second-mover advantage in differentiated-product Bertrand duopoly with asymmetric linear costs. First, we provide a thorough set of results in the cases where prices are either strategic substitutes and/or complements, dispensing with some common extraneous assumptions. Second, with linear demand for substitute goods, the scope for second-mover advantage crucially depends on the unit cost difference. A natural endogenous timing scheme coupled with equilibrium selection according to risk-dominance yields a unique outcome with the low-cost firm as leader.

Keywords: price competition; endogenous timing; second-mover advantage; risk dominance (search for similar items in EconPapers)
JEL-codes: C72 L13 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2000-12
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Citations: View citations in EconPapers (24)

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Related works:
Journal Article: Second-mover advantage and price leadership in Bertrand duopoly (2006)
Working Paper: Second-mover advantage and price leadership in Bertrand duopoly (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuieci:2000-10

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