Cournot Competition Outperforms Bertrand in Mixed Oligopolies with Foreign Ownership
This study looked at how competition between firms in a market changes when some firms have foreign ownership. They compared two types of competition: one where firms set their prices like a team (Cournot) and one where they compete directly on prices (Bertrand). The researchers found that when all firms pay the same price for their supplies, the competition type doesn't make a big difference. But if firms can be charged different prices by their suppliers, things can change. When foreign-owned suppliers set prices unfairly, the profits and outputs of the firms can flip from what they were under fair pricing. Surprisingly, when the foreign ownership is low and products are quite similar, society might actually do better with Cournot competition over Bertrand, even though usually it's the other way around. This means that in certain situations, Cournot competition can be better for everyone than Bertrand in markets where foreign companies are involved.