Häckner (2000) shows that in a differentiated oligopoly with more than two firms , prices may be higher under Bertrand competition than under Cournot competition, implying that the classical result of Singh and Vives (1984) that Bertrand prices are always lower than Cournot prices is sensitive to the duopoly assumption. Häckner (2000), however, le aves unanswered the important question of whether welfare may be lower under price competition. This note shows that in Häckner's model both consumer surplus and total surplus are higher under price competition than under quantity competition regardless of whether goods are substitutes or complements.
JEL Numbers: D43, L13
In this paper we study the optimal file-sharing mechanism in a peer-to-peer network with a mechanism design perspective. This mechanism improves upon existing incentive schemes. In particular, we show that peer-approved scheme is never optimal and service-quality scheme is optimal only under certain circumstances. Moreover, we find that the optimal mechanism can be implemented by a mixture of peer-approved and service-quality schemes.JEL Classification: D82, C72
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