Oligopolistic Competition in Price and Quality

Andrey Dubovik, MCW (Maarten) Janssen

Research output: Book/Report/Inaugural speech/Farewell speechReportAcademic


We consider an oligopolistic market where ¿rms compete in price and quality and where consumers are heterogeneous in knowledge: some consumers know both the prices and quality of the products offered, some know only the prices and some know neither. We show that two types of signalling equilibria are possible. Both are characterised by a dispersion and Pareto-inefficiency of the price/quality offers. But, better price/quality combinations are signalled with lower prices in one type and with higher prices in the other type. For common consumers¿ preferences it is the ¿rst type: the cheapest offer ¿ the best deal.
Original languageUndefined/Unknown
PublisherTinbergen Institute
EditionTinbergen Institute Discussion Paper TI 2008-068/1
Publication statusPublished - 2008

Publication series

SeriesTinbergen Institute Discussion Paper
VolumeTI 2008-068/1

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