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Title First-Mover and Second-Mover Advantages in a Bilateral Duopoly
Author DongJoon Lee (Nagoya University of Commerce and Business), Kangsik Choi (Pusan National University) and Kyuchan Hwang (Tokai Gakuen University)
Volume 33 Number 1
Keywords First- and Second-mover Advantage, Two-part Tariffs, Vertical Structure
Abstract This study examines a first-mover and a second-mover advantage in a vertical structure
in which each upstream firm trades with an exclusive retailer and downstream retailers
move sequentially. We provide two main claims. One is that, in Cournot (Bertrand)
competition, the leaders upstream firm sets the input price equal to its marginal cost (equal
to its marginal cost), while the followers upstream firm sets the input price below its
marginal cost (above its marginal cost). The other is that the followers (leaders) upstream
firm enjoys higher profits than the leaders (followers) upstream firm in Cournot (Bertrand)
File KER-20170630-33-1-02.pdf
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