Morganti, Paolo Riccardo
Thumbnail Image
Preferred name
Morganti, Paolo Riccardo
Official Name
Morganti, Paolo Riccardo
Alternative Name
pmorganti
Main Affiliation
ORCID
Scopus Author ID
57417762600
Researcher ID
GOP-3460-2022

Research Output

Filters

1
1
Reset filters

Settings
Now showing 1 - 1 of 1
No Thumbnail Available
Publication

Existence and uniqueness of price equilibria in location-based models of differentiation with full coverage

2022 , Hernández Cortés, Janko , Morganti, Paolo Riccardo

Abstract In location-based models of price competition, traditional sufficient conditions for existence and uniqueness of an equilibrium (Caplin and Nalebuff in Econometrica 59(1):25–59) are not robust for the firm that serves the right-tail of the consumers’ distribution. Interestingly, as we relax these conditions, we observe only two new alternative cases. Moreover, we identify a novel, easily testable condition for uniqueness that is weaker than log-concavity and that can also apply to Mechanism Design. Thanks to this general framework, we can solve the equilibrium of general vertical differentiation models numerically and show that inequality has a U-shaped effect on profits and prices of a high-quality firm. Moreover, we prove that extreme levels of concentration can dissolve natural monopolies and restore competition, contrary to the Uniform case.

View