Groupe d’études et de recherche en analyse des décisions

# Efficiency of Bertrand and Cournot under Precommitment

## Michèle Breton, Abdalla Turki et Georges Zaccour

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