WHOLESALE PRICES AND COURNOT‐BERTRAND COMPETITION |
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Authors: | Olga Rozanova |
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Institution: | Toulouse School of Economics, INRA‐GREMAQ departmentUniversity of Toulouse Capitole |
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Abstract: | This note considers the competing vertical structures framework with Cournot‐Bertrand competition downstream. It shows that the equilibrium wholesale price paid by a Cournot (Bertrand)‐type retailer is above (below) marginal costs of a corresponding manufacturer. This result contrasts with the one under pure competition downstream (i.e., Cournot or Bertrand), where the wholesale price is set below (above) marginal costs in case of a Cournot (Bertrand) game at the retail level. |
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Keywords: | wholesale prices vertical relations Cournot‐Bertrand model two‐part tariffs D43 L13 L14 |
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