Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/159060 
Year of Publication: 
1995
Series/Report no.: 
Quaderni - Working Paper DSE No. 217
Publisher: 
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna
Abstract: 
The issue of equilibrium selection in a duopoly game between a profit maximizing and a labour managed firm is addressed under either price or quantity competition with product differentiation. If firms can choose the timing of moves before competing in the relevant market variable, the Bertrand game yields multiple equilibria, while the Cournot game has a unique subgame perfect equilibrium with the profit maximizing firm in the leader's role and the labour managed firm in the follower's role. Due to a lower total output, the Cournot-Stackelberg equilibrium yields a lower level of social welfare as compared to the simultaneous equilibrium. This reduces the incentive to transform an LM duopoly into a mixed one.
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

Files in This Item:
File
Size
32.22 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.