Thursday, August 25, 2011
Posted by D. Daniel Sokol
Lin Liu (School of Business Administration, China University of Petroleum, Beijing Campus) and Yuanzhu Lu (China Economics and Management Academy, Central University of Finance and Economics) address Endogenous Timing in a Mixed Duopoly with Endogenous Vertical Differentiation.
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.