Consumers Rejoice: Higher-Quality Firms Charge Less Under Cournot Competition
In this study, the researchers looked at how companies set prices and compete in markets where products are different from each other. They created a model to compare how businesses make money and what's good for consumers in two types of competition: one where firms try to sell a lot (Cournot competition) and another where they try to have the lowest prices (Bertrand competition).
Three main discoveries emerged: