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- Title
EQUIVALENCE OF COMPETITION MODE IN A VERTICALLY DIFFERENTIATED DUOPOLY WITH DELEGATION.
- Authors
Wang, Ya-Chin; Wang, Leonard F. S.
- Abstract
This paper aims to examine the equivalence of competition mode in a vertically differentiated product market with the relative performance delegation. It demonstrates the equivalence of product quality and social welfare in this delegation game, irrespective of modes of product competition. In addition, in a three-stage game of quality-delegation-quantity (or price), it shows that the delegation coefficient is different between high-quality and low-quality firms in an asymmetric vertical differentiated model, and a high-quality firm makes better use of the delegation than a low-quality firm.
- Subjects
ECONOMIC competition; PUBLIC welfare; COMPETITIVE advantage in business; ECONOMIC models; TOTAL quality management
- Publication
South African Journal of Economics, 2009, Vol 77, Issue 4, p577
- ISSN
0038-2280
- Publication type
Article
- DOI
10.1111/j.1813-6982.2009.01225.x