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Intra-brand competition in a differentiated oligopoly

Breton, Michele; Sbragia, Lucia

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Authors

Michele Breton



Abstract

In this paper we consider a differentiated oligopoly with two product varieties that are supplied by two groups of firms. After computing the Cournot solution of the game, we study its sensitivity to different sources of competition, namely the degree of product substitutability and market composition. Market composition can change either via new firms entering one industry or via firms switching production techniques, thus modifying the intensity of intra-brand competition. After studying the welfare consequences of an intensification of competition, we identify the equilibrium market composition when firms are driven by profit considerations. All the results are expressed in terms of the degree of product substitutability and of what we define “weighted relative efficiency” (WRE), which is a parameter combining both firm characteristics and market conditions.

Citation

Breton, M., & Sbragia, L. (2020). Intra-brand competition in a differentiated oligopoly. Journal of Economics, 132(1), 1-40. https://doi.org/10.1007/s00712-020-00712-w

Journal Article Type Article
Acceptance Date Jul 16, 2020
Online Publication Date Aug 16, 2020
Publication Date 2020
Deposit Date Jan 23, 2020
Publicly Available Date Aug 20, 2020
Journal Journal of economics
Print ISSN 0931-8658
Electronic ISSN 1617-7134
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 132
Issue 1
Pages 1-40
DOI https://doi.org/10.1007/s00712-020-00712-w
Public URL https://durham-repository.worktribe.com/output/1278992

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http://creativecommons.org/licenses/by/4.0/

Copyright Statement
This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.





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