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Endogenous Timing In A Mixed Duopoly With Capacity Choice

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  • JUAN CARLOS BÁRCENA‐RUIZ
  • MARIA BEGOÑA GARZÓN

Abstract

An endogenous order of moves is analyzed in a mixed duopoly where firms first strategically choose their capacity levels and then compete at price level. In equilibrium, firms are shown to set prices simultaneously while capacities are chosen sequentially. This result is in contrast to the assumption of simultaneous order of moves for capacities choice made by Bárcena‐Ruiz and Garzón (Economics Bulletin, Vol. 12 (2007), pp. 1–7) in a mixed duopoly. Besides, we find that there are two equilibria: in one of them the public firm is the leader in capacities and, in the other, the follower.

Suggested Citation

  • Juan Carlos Bárcena‐Ruiz & Maria Begoña Garzón, 2010. "Endogenous Timing In A Mixed Duopoly With Capacity Choice," Manchester School, University of Manchester, vol. 78(2), pages 93-109, March.
    • Handle: RePEc:bla:manchs:v:78:y:2010:i:2:p:93-109
    DOI: 10.1111/j.1467-9957.2009.02137.x
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    References listed on IDEAS

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    4. Lin, Ming Hsin & Matsumura, Toshihiro, 2017. "Optimal Privatization and Uniform Subsidy Policies: A Synthesis," MPRA Paper 77285, University Library of Munich, Germany.

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