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Equivalence Of Competition Mode In A Vertically Differentiated Duopoly With Delegation

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  • Ya‐chin Wang
  • Leonard F.s. Wang
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.

Suggested Citation

  • Ya‐chin Wang & Leonard F.s. Wang, 2009. "Equivalence Of Competition Mode In A Vertically Differentiated Duopoly With Delegation," South African Journal of Economics, Economic Society of South Africa, vol. 77(4), pages 577-590, December.
    • Handle: RePEc:bla:sajeco:v:77:y:2009:i:4:p:577-590
    DOI: 10.1111/j.1813-6982.2009.01225.x
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    References listed on IDEAS

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    Cited by:

    1. Wang, Xingtang & Wang, Leonard F.S., 2021. "Vertical product differentiation, managerial delegation and social welfare in a vertically-related market," Mathematical Social Sciences, Elsevier, vol. 113(C), pages 149-159.
    2. Nakamura, Yasuhiko, 2015. "Price versus quantity in a mixed duopoly: The case of relative profit maximization," Economic Modelling, Elsevier, vol. 44(C), pages 37-43.
    3. Shih-Shen Chen & Po-Sheng Ko & Chien-Shu Tsai & Jen-Yao Lee, 2022. "Managerial Delegation and Conflicting Interest in Unionized Duopoly with Firm Heterogeneity," Mathematics, MDPI, vol. 10(22), pages 1-8, November.
    4. Leonard F. S. Wang, 2020. "Relative Performance Versus Market Share Delegation in a Vertically Related Market," Arthaniti: Journal of Economic Theory and Practice, , vol. 19(1), pages 16-27, June.
    5. Ya-Chin Wang, 2013. "Optimal R&D Policy and Managerial Delegation Under Vertically Differentiated Duopoly," South African Journal of Economics, Economic Society of South Africa, vol. 81(4), pages 605-624, December.

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