Duopoly and Endogenous Single Product Quality Strategies

This research paper investigates a duopolistic market characterized by vertical product differentiation. The study considers both qualities and consumer preferences represented as one-dimensional intervals. focus is on analyzing the equilibrium in duopoly game with convex production costs. In this setting, each firm has option to present multi-product strategy consisting of quality–price pairs, their profits are determined decisions made consumers. findings reveal that, under typical preference conditions, firms tend offer single pair. Additionally, shown be fully served, decrease index quality increases. A comparative analysis also conducted case monopoly.