A Further Note on Price and Quantity Competition in Differentiated Oligopolies

This study complements the results developed by Hackner (2000) and Hus and Wang (2005). It constructs a n-firm oligopoly model with product differentiation and compares optimal prices, profits and welfare obtained under Cournot competition with those under Bertrand competition. Three main results are demonstrated: (1) higher-qualified firms charge higher price under Bertrand competition than under Cournot competition 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.