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| Aika Monden, Shuhei Takezawa and Tomomichi Mizuno |
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| ''Quantity versus price competitions in a vertical relationship with separate downstream markets'' |
| ( 2025, Vol. 45 No.3 ) |
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| Contrary to conventional wisdom, our analysis of vertical relationships involving two independent downstream markets challenges the notion that Bertrand competition yields lower profits than Cournot competition. We show that if one downstream market in which two firms compete on either quantity or price is smaller than the other downstream market, then the input price under Bertrand competition is lower than under Cournot competition. This can lead to higher profits for downstream firms under Bertrand competition. |
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| Keywords: Cournot competition, Bertrand competition, vertical relationship, separate downstream market |
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
D4 - Market Structure and Pricing: General |
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| Manuscript Received : Dec 05 2024 | | Manuscript Accepted : Sep 30 2025 |
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