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X. Henry Wang
''Price and Quantity Competition Revisited''
( 2008, Vol. 4 No.8 )
By enlarging the parameter space originally considered by Singh and Vives (1984) to allow for a wider range of cost asymmetry, Zanchettin (2006) finds that the Singh and Vives result that firms always make larger profits under quantity competition than under price competition fails to hold. This paper shows that while profit ranking between price and quantity competition can be (partially) reversed the celebrated result by Singh and Vives that firms always choose a quantity contract in a two-stage game continues to hold in the enlarged parameter space.
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Feb 17 2008 Manuscript Accepted : Mar 13 2008

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