Efficiency of Bertrand and Cournot under Precommitment

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BibTeX reference

We consider a differentiated duopoly where firms invest in research and development (R&D) to reduce their production cost. We show that if the firms play a one stage game, i.e., they choose R&D and price (in Bertrand game) or quantity (in Cournot game)at the same time, then the usual result stating that Bertrand competition is more efficient than Cournot competition still holds.

, 12 pages


Efficiency of Bertrand and Cournot under precommitment
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Game Theory and Applications, 10, 31–38, 2005 BibTeX reference