Article1983

Quality and Quantity Competition

183 citations0/0 files storedThe Bell Journal of Economics

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Merger and Competition Analysis Consumer Market Behavior and Pricing Digital Platforms and Economics

Abstract

This article develops an oligopoly model where both prices and quality levels are determined at the equilibrium. Multiple symmetric equilibria arise when the distribution of consumers according to their willingness to pay is not uniform and more than one firm participates in the market. With a uniform distribution, we demonstrate that the impact of entry is to reduce average quality and to increase aggregate output. The implications for social welfare are ambiguous.

Citations in this library

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References

1978Monopoly and product quality 1982Relaxing Price Competition Through Product Differentiation 1975Monopoly, Quality, and Regulation 1982Consumer Information, Product Quality, and Seller Reputation 1977Consumer Misperceptions, Product Failure and Producer Liability 1980Entry (and exit) in a differentiated industry 1979Product Quality in Markets Where Consumers are Imperfectly Informed 1976Price, Quality and Quantity Regulation in Monopoly Situations

Cited by

2009Multimarket Contact and Service Quality: Evidence From On-Time Performance In the U.S. Airline Industry 1996Strategic Spillovers and Incentives for Research and Development 2010Price and quality in spatial competition 2003Price Discrimination and Imperfect Competition 2022Together we stand? Co-opetition for the development of green products 2006Multiproduct Cournot oligopoly 2013A Supply Chain Network Game Theory Model with Product Differentiation, Outsourcing of Production and Distribution, and Quality and Price Competition 2015Supply chain network competition in price and quality with multiple manufacturers and freight service providers

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