A note on price and quantity competition in differentiated oligopolies

In this note we show that the results developed in N. Singh and X. Vives (1 984, Rand J. Econ, 15, 546-554) are sensitive to the duopoly assumption. If there are more than two firms, prices may be higher under price competitio n than under quantity competition. This will be the case if quality differe nces are large and goods are complements. If goods are substitutes, high-qu ality firms may earn higher profits under price competition than under quan tity competition. Hence, it is not evident which kind of competition is mor e efficient. (C) 2000 Academic Press.