| Name: | Description: | Size: | Format: | |
|---|---|---|---|---|
| 1.82 MB | Adobe PDF |
Advisor(s)
Abstract(s)
In this paper, we consider a Stackelberg duopoly competition with
differentiated goods and with unknown costs. The firms' aim is to choose the output
levels of their products according to the well-known concept of perfect Bayesian
equilibrium. There is a firm ( F1 ) that chooses first the quantity 1 q of its good; the other
firm ( F2 ) observes 1 q and then chooses the quantity 2 q of its good. We suppose that
each firm has two different technologies, and uses one of them following a probability
distribution. The use of either one or the other technology affects the unitary production
cost. We show that there is exactly one perfect Bayesian equilibrium for this game. We
analyse the advantages, for firms and for consumers, of using the technology with the
highest production cost versus the one with the cheapest cost.
Description
Keywords
Game theory Industrial organization Optimization Stackelberg Duopoly Differentiation Uncertainty
Citation
Ferreira, F. A., Ferreira, F., & Pinto, A. (2008). Equilibria of Quantity Setting Differentiated Duopoly with Uncertainty. In V. Boljuncic, L. Neralic, & K. Soric (Eds.), Proceedings of the 11th International Conference on Operational Research. Zagreb: Croatian Operational Research Society.
Publisher
Croatian Operational Research Society