The Kreps-Scheinkman game in mixed duopolies

Bakó, Barna and Tasnádi, Attila (2014): The Kreps-Scheinkman game in mixed duopolies.

Abstract

In this paper we generalize the results of Kreps and Scheinkman (1983) to mixed-duopolies. We show that quantity precommitment and Bertrand competition yield Cournot outcomes not only in the case of private firms but also when a public firm is involved.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mixed duopoly, Cournot, Bertrand-Edgeworth.
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets

References

Bakó, B. and Tasnádi, A. (2014): A Kreps-Scheinkman állítás érvényessége lineáris keresletű vegyes duopóliumok esetén? (The Kreps and Scheinkman result remains valid for mixed duopolies with linear demand, in Hungarian), MPRA Paper No. 52746.

Balogh, T.L. and Tasnádi, A. (2012): Does timing of decisions in a mixed duopoly matter? Journal of Economics, Vol. 106, No. 3, 233-249.

Beato, P. and Mas-Colell, A. (1984): The marginal cost pricing as a regulation mechanism in mixed markets, in Marchand, M., Pestieau, P. and Tulkens, H. eds., The Performance of Public Enterprises, North-Holland, Amsterdam, 81-100.

Boccard, N. and Wauthy, X. (2000): Bertrand competition and Cournot outcomes: further results, Economics Letters, Vol. 68, No. 3, 279-285.

Boccard, N. and Wauthy, X. (2004): Bertrand competition and Cournot outcomes: a correction, Economics Letters, Vol. 84, No. 2, 163-166.

Cremer, H., Marchand, M. and Thisse, J.-F. (1989): The Public Firm as an Instrument for Regulating an Oligopolistic Market, Oxford Economic Papers, Vol. 41, No. 2, 283-301.

Davidson, C. and Deneckere, R. (1986): Long-Run Competition in Capacity, Short-Run Competition in Price, and the Cournot Model, Rand Journal of Economics, Vol. 17, No. 3, 404-415.

de Fraja, G. and Delbono, F. (1989): Alternative Strategies of a Public Enterprise in Oligopoly, Oxford Economic Papers, Vol. 41, No. 2, 302-311.

de Frutos, M.-A. and Fabra, N. (2011): The role of demand uncertainty, International Journal of Industrial Organization, Vol. 29, No. 4, 399-411.

George, K. and La Manna, M.M.A. (1996): Mixed Duopoly, Inefficiency, and Public Ownership, Review of Industrial Organization, Vol. 11, No. 6, 853-860.

Harris, R.G. and Wiens, E.G. (1980): Government enterprise: an instrument for the internal regulation of industry, Canadian Journal of Economics, Vol. 13, No. 1, 125-132.

Kreps, D.M. and Scheinkman, J.A. (1983): Quantity Precommitment and Bertrand Competition Yiels Cournot Outcomes, The Bell Journal of Economics, Vol. 14, No. 2, 326-337.

Lepore, J.J. (2012): Cournot outcomes under Bertrand-Edgeworth competition with demand uncertainty, Journal of Mathematical Economics, Vol. 48, No. 3, 177-186.

Loertscher, S. (2008): Market Making Oligopolies, Journal of Industrial Economics, Vol. 56, No. 2, 263-289.

Merrill, W.C. and Schneider, N. (1966): Government Firms in Oligopoly Industries: A Short-run Analysis, Quarterly Journal of Economics, Vol. 80, No. 3, 400-412.

Reynolds, S.S. and Wilson, B.J. (2000): Bertrand-Edgeworth Competition, Demand Uncertainty, and Asymmetric Outcomes, Journal of Economic Theory, Vol. 92, No. 1, 122-141.

Tomaru, Y. and Kiyono, K. (2010): Endogenous Timing in Mixed Duopoly with Increasing Marginal Costs, Journal of Institutional and Theoretical Economics, Vol. 166, No. 4, 591-613.

Vives, X. (1999): Oligopoly Pricing: Old Ideas and New Tools, MIT Press, Cambridge MA.

Wolfstetter, E. (1999): Topics in Microeconomics, Cambridge University Press, Cambridge UK.

Wu, Xin-wang, Zhu, Quan-tao and Sun, Laixiang (2012): On equivalence between Cournot competition and the Kreps–Scheinkman game, International Journal of Industrial Organization, Vol. 30, No. 1, 116-125.