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In the least-cost separating equilibrium, the high-quality monopolist separates in the way that it ??
The least-cost separating equilibrium is of particular interest, and it is also selected when standard re??
In a least-cost separating equilibrium, (P (H), A(H)) = (P *, A*).
Following argu- ments by Bagwell (1992) and Overgaard (1991), the existence of the least-cost separating equilibrium may be established.
As the bracketed term in (6.4) reveals, in the least-cost separating equilibrium, the high-quality monopolist makes the same price-advertising selection as it would were it to produce at constant marginal cost co [c(H) ?
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