Article ID Journal Published Year Pages File Type
5078397 International Journal of Industrial Organization 2008 8 Pages PDF
Abstract
A model with constant marginal costs is considered where firms choose first a period for production and then the amount to produce when competing in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry output configurations encompassing one limit-output dominant firm and the Cournot equilibrium with free entry as extreme cases. At each of these equilibria a firm produces a positive amount only if this firm commits to produce at period one. Both Stackelberg and Cournot-like outcomes are sustainable as equilibria however. When the number of leaders is given, production at subsequent periods is always prevented, and industry output is sometimes larger than the entry preventing level.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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