We model a two period game with duopoly market under either quantity or price competition. In the first period, the manufacturer decides on whether to accept the returned products. The optimal ratio of refurbishing is then determined in the second period once the manufacturer has decided to do refurbishing. We identify the optimality conditions that lead to different possible equilibrium outcomes for different scenarios in which two firms may play symmetrically or asymmetrically. Our extensive numerical analysis substantiates the analytical results and we focus on the effect on the subgame perfect equilibrium caused by various parameters. Among our results, we find that, as the return ratio increases, the profits generated from the refurbished market become harder to compensate the loss in the new product market. Besides, the increase of substitution effect in the quantity competition enhances the degree of satisfaction for the refurbished products and it hurts firm¡¦s performance in the more profitable new product market. However, the effect of substitution effect in the price competition is entirely opposite. For instance, when the substitution effect is high, only one firm enters the refurbished product market; and when the substitution effect is low, both firms enter the refurbished product market.

This thesis investigates different aspects of competition under uncertainty using the tools of game theory. In Chapter 1, I consider a quantity oligopoly game. One of the firms is presented with an opportunity to commit to some output before the demand becomes known, but may add to it afterwards, then moving simultaneously with the rivals. I show that the more cost-efficient firm is more likely to behave like a Stackelberg leader, i.e. to produce the optimal Stackelberg leader quantity ex-ante and refrain from adding to it later, letting the rivals respond to its ex-ante output in the manner of Stackelberg followers. In Chapter 2, I study a model of an electoral contest. Two symmetric parties allocate their endowments to building platforms on various issues before the start of a campaign. Next, one of the issues becomes decisive in the course of the campaign with a commonly known probability. The outcome of the election depends on the difference in competence in this issue. I show that if the payoff functions are convex in this difference-the case of 'increasing returns to power'-parties differentiate each other by selecting different campaign issues. On the contrary, when the payoff functions are concave in this difference-the case of 'decreasing returns to power'-parties mimic each other by investing the same amounts into the same issues. Thus, incentives for selecting campaign issues depend critically on the shape of the payoff functions, which might be determined by (1) a non-linear technology transforming parties' investment in various topics into voters' perception of their competence, (2) or parties' inherent motivation for winning by a big margin due to parties' ideological convictions or rent-seeking, (3) or an electoral system giving winners or big parties a disproportionate advantage in the assigned number of seats, (4) or a relatively high extent of power given to the winning party once in office.

Esta tesis consta de tres capítulos en donde analizo mercados con fricciones. En los dos primeros capítulos, estas fricciones surgen debido a la carencia información completa acerca de los precios por parte de los consumidores. Puntualmente, en el primer capítulo, se estudia como se desarrolla la competición de precio multiproducto en este tipo de ambiente. Se encuentra que la búsqueda por precios bajos por parte de los consumidores conlleva a que las firmas fijen los precios de los productos complementarios de manera correlativamente inversa. De esta manera, las firmas buscan incrementar sus ganancias valiéndose de aquellos consumidores que no investigan lo suficiente. En el siguiente capítulo se analiza cuales son los efectos que genera la búsqueda de mejores precios en la determinación de los mismos cuando las firmas tienen diferentes costos marginales. Se demuestra que firmas con diferentes estructuras de costos no pueden fijar los mismos precios en equilibrio. Debido a esto, mayores costos conllevan a mayores precios promedios. Finalmente, en el tercer capítulo, las fricciones emergen debido a que las firmas no tienen acceso a todos los mercados. Se analiza la competición en cantidades que se desarrolla luego de la etapa de inversión en capacidad productiva. Se demuestra que la capacidad productiva es mayor que la generada en un modelo Cournot estándar debido los incentivos pro-competitivos presentes en los mercados fragmentados. / This thesis consists of three chapters analyzing markets with frictions. In the first two chapters frictions result from consumers not knowing all the prices and searching for them. The first chapter studies multiproduct price competition in this environment. It finds that consumer search induces firms to negatively correlate prices of complements in order to rip-off consumers who do not search enough. The second chapter studies the effects of consumer search on price competition when firms have different marginal costs. It demonstrates that firms with different costs cannot charge common prices in equilibrium. Due to this, the higher are the costs the higher are the average prices charged by firms. In the third chapter frictions emerge because firms do not have access to all the markets. It analyzes quantity competition following a capacity investment stage to show that equilibrium capacity is larger than in a standard Cournot model because of pro-competitive incentives in fragmented markets.