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DUOPOLY MODELS WITH VERTICAL PRODUCT DIFFERENTIATION

DAVE FURTH

Faculty of Economics and Business, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands

On 11 February 2011, Dave Furth passed away at his home in Amsterdam after being ill for some time. Dave continued to work as a mathematical economist and game theorist at the University of Amsterdam and at home until the very end. His friendly smile will always be remembered.

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https://doi.org/10.1142/S0219198911002903Cited by:4 (Source: Crossref)

Abstract

This paper deals with duopoly models with vertical product differentiation. These are two-stage games. In the first stage, the quality game, the two firms choose their quality. In the second stage, the price game, they choose their prices. When the market is covered, the properties of this game are well known, even when the consumers are not uniformly distributed. When the market is uncovered the literature is not always clear about these models. In the present paper it is shown that the price game can be solved, when the consumers are distributed according to a distribution function with a log-concave density function.

Keywords:

JEL: L13

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