Would You Like to Enter First with a Low-Quality Good?

Piero Tedeschi, Luca Lambertini

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

Using a two-period duopoly model with vertical differentiation, we show that there exists a unique subgame perfect equilibrium where the first entrant supplies a lower quality and gains higher profits than the second entrant. We also prove that this entry sequence is socially efficient.
Original languageEnglish
Pages (from-to)269-282
Number of pages14
JournalBulletin of Economic Research
Volume59
Publication statusPublished - 2007

Keywords

  • differentiation
  • industrial organization
  • innovation

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