Theoretical Economics Letters

Volume 3, Issue 4 (August 2013)

ISSN Print: 2162-2078   ISSN Online: 2162-2086

Google-based Impact Factor: 1.34  Citations  

Social Welfare under Quantity Competition and Price Competition in a Mixed Duopoly with Network Effects: An Analysis

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DOI: 10.4236/tel.2013.34035    5,036 Downloads   7,775 Views  Citations
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ABSTRACT

In their recent work, Matsumura and Ogawa (2012) showed that in the context of a mixed duopoly, equilibrium social welfare is higher in price-setting competition than in quantity-setting competition. We found that when the strength of network effects is sufficiently high, the above result is totally reversed; thus, in a mixed duopoly, the presence of network effects weakens the superiority of price-setting competition with respect to equilibrium social welfare.

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Nakamura, Y. (2013) Social Welfare under Quantity Competition and Price Competition in a Mixed Duopoly with Network Effects: An Analysis. Theoretical Economics Letters, 3, 211-215. doi: 10.4236/tel.2013.34035.

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