Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159184
Authors: 
Lambertini, Luca
Sasaki, Dan
Poddar, Sougata
Year of Publication: 
1998
Series/Report no.: 
Quaderni - Working Paper DSE 343
Abstract: 
We inspect the interlink between the endogenous choice of price- and quantity- setting behavior in an oligopolic market, and cost sharing among oligopolists. A typical situation of this sort is an oligopoly game where firms invest in product development first, and ten play a marketing game later. Only in the initial investment stage ,the firms set up a joint venture in order to share the costs. We discover that, in the presence of shared costs, the well-established result by Singh and Vives (1984) that firms endogenously choose quantity (resp., price) as a dominant strategy when their products are substitutes (resp., complements) may not be the only equilibrium outcome. In particular, the procedural order between firms` cost sharing decisions and their marketing decisions make a key difference in the resulting equilibrium profiles.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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