A Further Note on Price and Quantity Competition in Differenitated Oligopolies," mimeo

This study complements the results developed by Häckner (2000) and Hus and Wang (2005). It constructs a n-firm oligopoly model with prod-uct differentiation and compares optimal prices, profits and welfare ob-tained under Cournot competition with those under Bertrand competi-tion. Three main results are demonstrated: (1) higher-qualified firms charge higher price under Bertrand competition than under Cournot com-petition when the goods are complements; (2) it depends on the ratio of the market average quality to the individual quality whether Cournot profit is higher than Bertrand profit or not; (3) social welfare (the sum of consumer surplus and profits) can be higher under Cournot competition than under Bertrand competition in the case of higher-qualified firms.