Conjectural cost variations in a differentiated good oligopoly

Jens Jurgan

No 80, W.E.P. - Würzburg Economic Papers from University of Würzburg, Department of Economics

Abstract: In the homogenous good case, the relationship between market structure and efficiency was studied extensively. Assuming a standard quadratic utility with quantity competition, this paper carries on the analysis in a differentiated good context. It can be shown that there is a positive relationship between market heterogeneity and efficiency, too. In contrast to the homogenous good case, consumer surplus as well as producer surplus increases with the dispersion of marginal costs.

Keywords: Differentiated goods; Cournot; Asymmetric costs; Cost variation; Welfare (search for similar items in EconPapers)
JEL-codes: L11 L13 L4 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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