Please use this identifier to cite or link to this item:
Lambertini, Luca
Ecchia, Giulio
Year of Publication: 
Series/Report no.: 
Quaderni - Working Paper DSE 311
The existence of a pure-strategy subgame perfect equilibrium in qualities and prices is investigated in a duopoly model of vertical differentiation where quality improvements require a quadratic variable cost. The alternative cases of partial and full market coverage are considered. It is shown that there exists a parameter range where the incentive to decrease differentiation arises for the high-quality firm, preventing firms to reach a pure-strategy duopoly equilibrium.
Persistent Identifier of the first edition: 
Creative Commons License:
Document Type: 
Working Paper

Files in This Item:
127.62 kB

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