On Welfare under Cournot and Bertrand Competition in Differentiated Oligopolies

X. Wang () and Yu-Pei Hsu

No 514, Working Papers from Department of Economics, University of Missouri

Abstract: Hackner (2000) shows that in a differentiated oligopoly with more than two firms , prices may be higher under Bertrand competition than under Cournot competition, implying that the classicalresult of Singh and Vives (1984) that Bertrand prices are always lower than Cournot prices is sensitive to the duopoly assumption. Hackner (2000), however, leaves unanswered the important question of whether welfare may be lower under price competition. This note shows that in Hackners model both consumer surplus and total surplus are higher under price competition than under quantity competition regardless of whether goods are substitutes or complements.

Keywords: Bertrand; Cournot; Differentiated oligopoly; Welfare (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2005-06-15
Note: Length: 10 pgs.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Published in Review of Industrial Organization 2005

Downloads: (external link)
https://drive.google.com/file/d/1GEjGJY5bhV87__2uI ... -OT/view?usp=sharing (application/pdf)

Related works:
Journal Article: On Welfare under Cournot and Bertrand Competition in Differentiated Oligopolies (2005)
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:umc:wpaper:0514

Access Statistics for this paper

More papers in Working Papers from Department of Economics, University of Missouri Contact information at EDIRC.
Bibliographic data for series maintained by Chao Gu ().