Breitmoser, Yves (2010): A general model of oligopoly endogenizing Cournot, Bertrand, Stackelberg, and Allaz-Vila.
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This paper analyzes a T-stage model of oligopoly where firms build up capacity and conclude forward sales in stages t<T, and they choose production quantities in t=T. We consider the case of n firms with asymmetric marginal costs. In the two-stage game, the set of outcomes is a quasi-hyperrectangle including Cournot, Allaz-Vila, and all two-stage Stackelberg outcomes. In general, it consists of T-1 such hyperrectangles where the lower bound approaches the Bertrand outcome as T tends to infinity. In the limit, a range of outcomes stretching from Cournot via Stackelberg to Bertrand can result in equilibrium, i.e. the mode of competition is entirely endogenous.
|Item Type:||MPRA Paper|
|Original Title:||A general model of oligopoly endogenizing Cournot, Bertrand, Stackelberg, and Allaz-Vila|
|Keywords:||forward sales, capacity precommitment, Cournot, Stackelberg, Bertrand|
|Subjects:||D - Microeconomics > D4 - Market Structure and Pricing > D43 - Oligopoly and Other Forms of Market Imperfection
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
|Depositing User:||Yves Breitmoser|
|Date Deposited:||14. Jan 2010 16:12|
|Last Modified:||12. Feb 2013 00:51|
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