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Production targets Author info | Abstract | Publisher info | Download info | Related research | Statistics Guillermo Caruana
Liran Einav
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We analyze a dynamic model of quantity competition, where firms continuously adjust their quantity targets, but incur convex adjustment costs when they do so. Quantity targets serve as a partial commitment device and, in equilibrium, follow a hump-shaped pattern. The final equilibrium is more competitive than in the static analog. We then use data on monthly production targets of the Big Three U.S. auto manufacturers and show a similar empirical hump-shaped dynamic pattern. Taken together, this suggests that strategic considerations may play a role in setting auto production schedules, and that static models may misestimate the industry's competitiveness. Copyright (c) 2008, RAND.
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Article provided by RAND Corporation in its journal The RAND Journal of Economics .
Volume (Year): 39 (2008)
Issue (Month): 4 ()
Pages: 990-1017
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Handle: RePEc:bla:randje:v:39:y:2008:i:4:p:990-1017Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0741-6261
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Paper Guillermo Caruana & Liran Einav, 2006.
"Production Targets ,"
2006 Meeting Papers
16, Society for Economic Dynamics.
[Downloadable!] Guillermo Caruana & Liran Einav, 2006.
"Production Targets ,"
Working Papers
wp2006_0602, CEMFI.
[Downloadable!] Guillermo Caruana & Liran Einav, 2006.
"Production Targets ,"
NBER Working Papers
11958, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: George Hall & Adam Copeland & Wendy Dunn, 2005.
"Prices, Production, and Inventories Over the Automotive Model Year ,"
2005 Meeting Papers
346, Society for Economic Dynamics.
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Other versions:
Adam Copeland & Wendy Dunn & George Hall, 2005.
"Prices, production, and inventories over the automotive model year ,"
Finance and Economics Discussion Series
2005-25, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!] Adam Copeland & Wendy Dunn & George Hall, 2005.
"Prices, Production and Inventories over the Automotive Model Year ,"
NBER Working Papers
11257, National Bureau of Economic Research, Inc.
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Fershtman, Chaim & Kamien, Morton I, 1987.
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Maura P. Doyle & Christopher M. Snyder, 1999.
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C. Lanier Benkard, 2004.
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Romano, Richard & Yildirim, Huseyin, 2005.
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Kahn, James A, 1992.
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Other versions: Fudenberg, Drew & Tirole, Jean, 1984.
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