In a differentiated triopoly model with heterogeneous firms, the local stability of the Nash equilibrium under both quantity and price competition is analyzed. We find that the presence of a firm following a gradient rule based on marginal profits, and a player with adaptive expectations, determines the local stability of the Nash equilibrium, regardless the competition type, while the effects of the degree of product differentiation on the stability depend on the nature of products. Moreover, the Nash equilibrium is more stable under quantity competition than under price competition.

No abstract

No abstract

No abstract

The paper examines the effects of subcontracting on vertical product differentiation in a spatial competition model. It is shown that the level of differentiation is determined by the consignor's bargaining power and the ratio of the transport rates between the final product and the subcontracted input. Furthermore, the paper finds that part of the results obtained under horizontal product differentiation are not reproduced in a vertical product context. Copyright (c) 2009 the author(s). Journal compilation (c) 2009 RSAI.