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Price leadership in a vertically differentiated market

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  • Li, Youping

Abstract

This paper compares the equilibrium outcomes under simultaneous and sequential price settings in a vertically differentiated market. When the timing of the price game is determined endogenously, it is shown that the sequential play with the high quality firm leading emerges, yielding the highest industry profit but the lowest social welfare among the different timings.

Suggested Citation

  • Li, Youping, 2014. "Price leadership in a vertically differentiated market," Economic Modelling, Elsevier, vol. 38(C), pages 67-70.
    • Handle: RePEc:eee:ecmode:v:38:y:2014:i:c:p:67-70
    DOI: 10.1016/j.econmod.2013.12.005
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    Cited by:

    1. Scott M. Gilpatric & Youping Li, 2016. "Endogenous Price Leadership and the Strategic Acquisition of Information," Southern Economic Journal, John Wiley & Sons, vol. 82(3), pages 859-873, January.
    2. Yushi Tsunoda, 2022. "When should a firm set its selling price to cope with gray market trade?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 16-25, January.
    3. Francisco Martínez-Sánchez, 2024. "Competing to Sell the Reference Product," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(4), pages 515-531, June.
    4. Scott M. Gilpatric & Youping Li, 2021. "Endogenous Price Leadership and Product Positioning," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 58(2), pages 287-302, March.
    5. Crisan Lucian Ciprian, 2014. "U.S. Navy Seals - A Role model for the modern leadership," Proceedings of International Academic Conferences 0902784, International Institute of Social and Economic Sciences.
    6. Peter-J. Jost, 2023. "Price commitment and the strategic launch of a fighter brand," Quantitative Marketing and Economics (QME), Springer, vol. 21(3), pages 381-435, September.

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    More about this item

    Keywords

    Vertical differentiation; Price leadership; Endogenous timing; Welfare;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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