Jonas Häckner: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Abstract: In this not we show that the results developed in Singh and Vives (1984) are sensitive to the duopoly assumtion (Rand Journal of Economics 15, 546-554). If there are more than two firms, prices may be higher under price competition than unde quantity competition. This will be the case if quality differences are large and goods are complements. If goods are substitutes, high-quality fims may earn higher profits unde price competion than under quantity competition. Hence, it is not evident which kind of competition is more efficient.
8 pages, August 17, 1999
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