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The Cournot-Bertrand profit differential in a differentiated duopoly with unions and labour decreasing returns

Luciano Fanti () and Nicola Meccheri ()

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: This paper compares Cournot and Bertrand equilibria in a differentiated duopoly (with imperfect substitutes), total wage bill maximizing unions and labour decreasing returns. It is shown that the standard result, that equilibrium profits are always higher under Cournot, may be reversed even for a fairly low degree of product differentiation. Moreover, the presence of labour decreasing returns tends to reinforce the mechanisms that contribute to the reversal result, making this event possible for a wider range of situations, with respect to those identified by the earlier literature.

Keywords: Cournot-Bertrand profit differential; unions; labour decreasing returns. (search for similar items in EconPapers)
JEL-codes: J43 J50 L13 (search for similar items in EconPapers)
Date: 2010-11-10
New Economics Papers: this item is included in nep-bec and nep-mic
Note: ISSN 2039-1854
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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Related works:
Journal Article: The Cournot-Bertrand profit differential in a differentiated duopoly with unions and labour decreasing returns (2011) Downloads
Working Paper: The Cournot-Bertrand Profit Differential in a Differentiated Duopoly with Unions and Labour Decreasing Returns (2010) Downloads
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