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Frédéric DEROÏAN
''A Note on Cost-Reducing Alliances in Vertically Differentiated Oligopoly''
( 2004, Vol. 12 No.11 )
In a vertically differentiated oligopoly, firms raise cost-reducing alliances before competing with each other. It is shown that heterogeneity in quality and in cost functions reduces individual incentives to form links. Furthermore, both differentiated Cournot and Bertrand competition qualitatively similar incitations to form alliances.
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
L2 - Firm Objectives, Organization, and Behavior: General
Manuscript Received : Sep 30 2004 Manuscript Accepted : Dec 23 2004

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