Price and quantity competition in homogeneous duopoly markets

Beth Allen

doi:10.1016/0165-1765(92)90028-W

Price and quantity competition in homogeneous duopoly markets

Beth Allen

Economics (Twin Cities)

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

A noncooperative duopoly game is formulated in which the quantity player sells its entire amount (up to consumer demand) while the price player supplies residual demand; both firms transact at the same price. Depending on the ordering, two-stage subgame perfect equilibria are equivalent to simultaneous price and quantity Nash equilibria or include also the Stackelberg equilibrium. In any case, a firm prefers to be the quantity player.

Original language	English (US)
Pages (from-to)	417-422
Number of pages	6
Journal	Economics Letters
Volume	38
Issue number	4
DOIs	https://doi.org/10.1016/0165-1765(92)90028-W
State	Published - Apr 1992

Bibliographical note

Funding Information:
Correspondence to: Professor Beth Allen, Department Philadelphia, PA 19104-6297, USA * This research was supported by NSF Grant SES88-21442. The manuscript Social and Economic Research at Osaka University, supported by a grant about price and quantity games as a result of supervising an undergraduate

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Copyright 2014 Elsevier B.V., All rights reserved.

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N2 - A noncooperative duopoly game is formulated in which the quantity player sells its entire amount (up to consumer demand) while the price player supplies residual demand; both firms transact at the same price. Depending on the ordering, two-stage subgame perfect equilibria are equivalent to simultaneous price and quantity Nash equilibria or include also the Stackelberg equilibrium. In any case, a firm prefers to be the quantity player.

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Price and quantity competition in homogeneous duopoly markets

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