Inventory Holding and a Mixed Duopoly with a Foreign Joint-Stock Firm

Ohnishi, Kazuhiro (2018): Inventory Holding and a Mixed Duopoly with a Foreign Joint-Stock Firm.

Abstract

This paper investigates a mixed duopoly model in which there is a state-owned firm competing with a foreign joint-stock firm. The following situation is considered. In the first period, each firm non-cooperatively decides how many it sells in the current market. In addition, each firm can hold inventory for the second-period market. By holding large inventory, a firm may be able to commit to large sales in the next period. In the second period, each firm non-cooperatively chooses its second-period output. At the end of the second period, each firm sells its first-period inventory and its second-period output and holds no inventory. The paper traces out the firms’ reaction functions in the mixed duopoly model.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inventory holding, state-owned firm, foreign joint-stock firm, reaction curves
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L30 - General

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