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Intra-brand competition in a differentiated oligopoly.

Breton, Michele and Sbragia, Lucia (2020) 'Intra-brand competition in a differentiated oligopoly.', Journal of economics., 132 (1). pp. 1-40.

Abstract

In this paper we consider a differentiated oligopoly with two product varieties that are supplied by two groups of firms. After computing the Cournot solution of the game, we study its sensitivity to different sources of competition, namely the degree of product substitutability and market composition. Market composition can change either via new firms entering one industry or via firms switching production techniques, thus modifying the intensity of intra-brand competition. After studying the welfare consequences of an intensification of competition, we identify the equilibrium market composition when firms are driven by profit considerations. All the results are expressed in terms of the degree of product substitutability and of what we define “weighted relative efficiency” (WRE), which is a parameter combining both firm characteristics and market conditions.

Item Type:Article
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Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1007/s00712-020-00712-w
Publisher statement:This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Date accepted:16 July 2020
Date deposited:28 July 2020
Date of first online publication:16 August 2020
Date first made open access:20 August 2020

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