Download Free Comparing Duopoly Prices And Quantities In Different Competition Models Book in PDF and EPUB Free Download. You can read online Comparing Duopoly Prices And Quantities In Different Competition Models and write the review.

Undergraduate economic students usually learn different models of duopoly competition: Cournot, Bertrand, Cournot-Stackelberg, Bertrand-Stackelberg and joint profit maximization. While the textbooks usually claim that different models lead to different levels of competitiveness, there does not exist comprehensive comparison of five cases with asymmetric firms. This paper fills this gap, and shows a clear price (output) ranking among these five markets when goods are substitutes (complements). The rankings are linked to the levels of conjectural variation associated with each duopoly market outcome.
In a monopoly, the equilibrium outcome is the same no matter if firms compete on price or on quantity. However, lots of firms have visible rivals with whom strategic interaction is a fact of life. This is known as imperfect competition. With imperfect competition, competing on price will lead to a different outcome than competing on quantity. Each firm needs to analyze what strategy, price or quantity, brings the highest profit for the firm and the highest surplus for the consumer. In order to compare and contrast price and quantity competition, two classical models of duopoly, the Cournot and the Bertrand model, are introduced. These two models can be analyzed according to different setups. Homogeneous and heterogeneous goods are considered. Also, it is important to distinguish between simultaneous and sequential move of the firms in their strategic interaction. The sequential choosing of actions makes the game dynamic and is known as the Stackelberg game. Furthermore, it is necessary to distinguish between exogenous and endogenous moving time decision of the firms. This analysis should be especially useful to students and researchers in Microeconomics.
The author attempts to present an exhaustive examination of the models that can be constructed by considering price and/or quantity at the strategic variables. These included the Cournot, Edgeworth and Bertrand cases as well as two further models reflecting the effect of inventory costs and penalties for failure to supply. Each model had a different noncooperative solution. The difference between Bertrand and Edgeworth hinged upon capacity conditions. Given limited capacity the price, price-quantity and stock penalty models all gave rise to an instability manifested by the existence of the Edgeworth cycle (which is of the same length for both the price and price-quantity models) and the somewhat different 'stockout cycles' when the stock penalty is sufficiently low in the stock penalty model. It is of interest to note that when the stockout penalty is large the resultant equilibria yield higher payoffs to the firms than they would obtain noncooperatively without the penalty. One may regard the penalty as providing an extra threat available to help enforce the equilibrium. The power of competitive price-cutting becomes so great that neither wishes to risk using the weapon too much.
New York Times bestseller! "Few are better positioned to illuminate the vagaries of this transformation than Galloway, a tech entrepreneur, author and professor at New York University’s Stern School. In brisk prose and catchy illustrations, he vividly demonstrates how the largest technology companies turned the crisis of the pandemic into the market-share-grabbing opportunity of a lifetime." --The New York Times "As good an analysis as you could wish to read." --The Financial Times From bestselling author and NYU Business School professor Scott Galloway comes a keenly insightful, urgent analysis of who stands to win and who's at risk to lose in a post-pandemic world The COVID-19 outbreak has turned bedrooms into offices, pitted young against old, and widened the gaps between rich and poor, red and blue, the mask wearers and the mask haters. Some businesses--like home exercise company Peloton, video conference software maker Zoom, and Amazon--woke up to find themselves crushed under an avalanche of consumer demand. Others--like the restaurant, travel, hospitality, and live entertainment industries--scrambled to escape obliteration. But as New York Times bestselling author Scott Galloway argues, the pandemic has not been a change agent so much as an accelerant of trends already well underway. In Post Corona, he outlines the contours of the crisis and the opportunities that lie ahead. Some businesses, like the powerful tech monopolies, will thrive as a result of the disruption. Other industries, like higher education, will struggle to maintain a value proposition that no longer makes sense when we can't stand shoulder to shoulder. And the pandemic has accelerated deeper trends in government and society, exposing a widening gap between our vision of America as a land of opportunity, and the troubling realities of our declining wellbeing. Combining his signature humor and brash style with sharp business insights and the occasional dose of righteous anger, Galloway offers both warning and hope in equal measure. As he writes, "Our commonwealth didn't just happen, it was shaped. We chose this path--no trend is permanent and can't be made worse or corrected."
We consider a mixed duopoly in which private and public firms can choose to strategically set prices or quantities when the public firm is less efficient than the private firm. Thus, even with cost asymmetry, we obtain exactly the same result (i.e., Bertrand competition) of Matsumura and Ogawa (2012) if Singh and Vives' (1984) assumption of positive primary outputs holds. However, compared to endogenous determination of the type of contract without cost asymmetry, our main finding is that in the wider range of cost asymmetry, different type(s) of equilibrium related to or not related to the limit-pricing strategy of the private firm can be sustained. Thus, when considering an implication on privatization, we may overestimate the welfare gain of privatization because Cournot competition takes place after privatization even though cost asymmetry exists between firms. While the result of Matsumura and Ogawa (2012) holds true if the goods are complements, we find the novel results in the case of substitutes.
Explains the economics of electricity at each step of the supply chain: production, transportation and distribution, and retail.