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A Note on Cost-reducing Alliances in Vertically Differentiated Oligopoly

Author

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  • Frédéric Deroïan

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

In a vertically differentiated oligopoly, firms raise cost-reducing alliances before competing with each other. It is shown that heterogeneity in quality and in cost functions reduces individual incentives to form links. Furthermore, both differentiated Cournot and Bertrand competition qualitatively similar incitations to form alliances.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Frédéric Deroïan, 2004. "A Note on Cost-reducing Alliances in Vertically Differentiated Oligopoly," Post-Print halshs-00369726, HAL.
    • Handle: RePEc:hal:journl:halshs-00369726
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    References listed on IDEAS

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    5. Symeonidis, George, 2003. "Quality heterogeneity and welfare," Economics Letters, Elsevier, vol. 78(1), pages 1-7, January.
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    More about this item

    Keywords

    Differentiated Oligopoly; Firms's Heterogeneity; Cost-Reducing Alliances; Stability;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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