ENDOGENOUS TIMING IN A MIXED DUOPOLY WITH ENDOGENOUS VERTICAL DIFFERENTIATION

Authors

  • Lin Liu,

    1. School of Business Administration, China University of Petroleum, Beijing Campus, China
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  • Yuanzhu Lu

    Corresponding author
    1. China Economics and Management Academy, Central University of Finance and Economics, Beijing, China
    • Correspondence: Yuanzhu Lu, China Economics and Management Academy, Central University of Finance and Economics, 39 South College Road, Beijing, China, 100081. Tel: (8610)62288397; Fax: (8610)62288376; Email: yuanzhulu@cufe.edu.cn.

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  • Yuanzhu Lu thanks the New Century Excellent Talents in University programme (No. NCET-11–0751) for financial support.

ABSTRACT

We consider a game of endogenous timing with observable delay in a mixed duopoly with endogenous vertical differentiation in the context of sequential quality and price choice. We find that a simultaneous play in the first opportunity at each stage turns out to be the unique subgame perfect Nash equilibrium, which contrasts with the endogenous timing in a purely private duopoly.

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