| Summary: | 碩士 === 佛光大學 === 經濟學系 === 97 === In this paper we examine in a duopoly model with vertical differentiation, if the firms are uncovered the whole market, we show that in a model with vertical quality differentiation a game with sequential choice induces both firms under the price competition, and quantity competition respectively. There are four-stage in the non-cooperative game. The first stage, one firm which chooses on quality first will be the pioneer, and determine the equilibrium quality. The second stage, the other firm which chooses on quality late will be the follower, and determine the equilibrium quality. The third stage, one firm which chooses on price (quantity) first will be the pioneer. The forth stage, the other firm which chooses on price (quantity) late will be the follower, and the follower observed price (quantity) of pioneer, determine the price (quantity) on their own.
The results of this study are as follow: the high-quality firm yields the same quality product whether in terms of price competition or quantity competition. In the quantity competition setting, in order to obtain higher profits, or the high-quality firm will choose to enter the market first, but in the price competition setting, high-quality firm will choose to enter the market late. The low-quality firm yields product of low quality under quantity competition is greater than under price competition. In order to obtain higher profits, the low-quality firm yields product of low quality under quantity competition that the firm is either pioneer or follower. Finally, comparing price competition and quantity competition, we show that the pioneer is either high-quality firm or low-quality firm, social welfare under quantity competition is more intense price competition, an uncovered market of quality competition outcome yields higher social welfare than outcome yields of price competition. In the quantity competition setting is better than price competition setting, the market covered by relatively large under quantity competition.
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