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Endogenous Timing In A Mixed Duopoly With Capacity Choice

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  • JUAN CARLOS BÁRCENA-RUIZ
  • MARIA BEGO�A 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. Copyright � 2010 The Authors. Journal compilation � 2010 Blackwell Publishing Ltd and The University of Manchester.

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Bibliographic Info

Article provided by University of Manchester in its journal The Manchester School.

Volume (Year): 78 (2010)
Issue (Month): 2 (03)
Pages: 93-109

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Handle: RePEc:bla:manchs:v:78:y:2010:i:2:p:93-109

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Cited by:
  1. Rupayan Pal, 2010. "How much should you own? Cross-ownership and privatization," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-015, Indira Gandhi Institute of Development Research, Mumbai, India.

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