Combining the endogenous choice of timing and competition version in a mixed duopoly

Abstract

This paper extends Sun (Econ Lett 120:364–368, 2013) conceptcombining the endogenous choice of timing and competition version from a pure duopoly model to a mixed duopoly model. We find that choosing a price contract and playing in the first period make up a dominant strategy for the private firm. The public firm’s best response to the private firm’s dominant strategy is also to choose a price contract and play in the first period. As a result, simultaneous price competition is the unique equilibrium outcome, no matter whether the goods are substitutes or complements. Combining the findings in Sun (Econ Lett 120:364–368, 2013), we present that simultaneous price competition is the unique result with complement products, irrespective of whether for a pure duopoly model or for a mixed duopoly model.