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Dynamic Duopoly: Prices and Quantities

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Author Info
Benoit, Jean-Pierre
Krishna, Vijay
Abstract

The authors study a dynamic model of duopoly in which firms choose both prices and quantities. If quantity (capacity) choices are relatively inflexible , firms generally carry excess (idle) capacity in equilibrium. Because of this enforcement cost, firms are unable to achieve monopoly levels. This contrasts wit h models in which firms compete in either prices or quantities alone. On the oth er hand, if capacities are flexible, firms may be able to sustain monopoly behavior. Copyright 1987 by The Review of Economic Studies Limited.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 54 (1987)
Issue (Month): 1 (January)
Pages: 23-35
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Handle: RePEc:bla:restud:v:54:y:1987:i:1:p:23-35

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  1. Christou, Charalambos & Kotseva, Rossitsa & Vettas, Nikolaos, 2007. "Pricing, Investments and Mergers with Intertemporal Capacity Constraints," CEPR Discussion Papers 6433, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Francisco Rodríguez, 2006. "The Anarchy of Numbers: Understanding the Evidence on Venezuelan Economic Growth," Wesleyan Economics Working Papers 2006-009, Wesleyan University, Department of Economics. [Downloadable!]
  3. Dechenaux, Emmanuel & Kovenock, Dan, 2003. "Endogenous Rationing, Price Dispersion, and Collusion in Capacity Constrained Supergames," Purdue University Economics Working Papers 1164, Purdue University, Department of Economics. [Downloadable!]
  4. R. Cellini & L. Lambertini, 2000. "Non-Linear Marcket Demand and Capital Accumulation in A Differential Oligopoly Game," Working Papers 372, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  5. Jun, Byoung & Vives, Xavier, 2001. "Incentives in Dynamic Duopoly," CEPR Discussion Papers 2899, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Arijit Mukherjee, 2002. "Capacity Commitment and Licensing," Industrial Organization 0211004, EconWPA. [Downloadable!]
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  7. Lars-Hendrik Roller & Frode Steen, 2006. "On the Workings of a Cartel: Evidence from the Norwegian Cement Industry," American Economic Review, American Economic Association, vol. 96(1), pages 321-338, March. [Downloadable!]
  8. Raymond Deneckere & Dan Kovenock, 1988. "Price Leadership," Discussion Papers 773, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  9. Bergman, Mats A., 1998. "Endogenous Timing of Investments Yields Modified Stackelberg Outcomes," Working Paper Series in Economics and Finance 272, Stockholm School of Economics. [Downloadable!]
  10. Felix Höffler, 2009. "Mobile termination and collusion, revisited," Journal of Regulatory Economics, Springer, vol. 35(3), pages 246-274, June. [Downloadable!] (restricted)
  11. de Frutos, Maria-Angeles & Fabra, Natalia, 2007. "Endogenous Capacities and Price Competition: The Role of Demand Uncertainty," CEPR Discussion Papers 6096, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  12. Felix Hoeffler, 2006. "Mobile termination and collusion, revisited," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2006_16, Max Planck Institute for Research on Collective Goods. [Downloadable!]
  13. Thierry Penard, 1997. "Choix de capacités et comportements stratégiques," Annales d'Economie et de Statistique, ADRES, issue 46, pages 09, Avril-Jui. [Downloadable!]
  14. Joseph E. Harrington, Jr, 2005. "Detecting Cartels," Economics Working Paper Archive 526, The Johns Hopkins University,Department of Economics. [Downloadable!]
  15. Charalambos Christou & Rossitsa Kotseva & Nikolaos Vettas, 2009. "Pricing, Investments and Mergers with Intertemporal Capacity Constraints," Discussion Paper Series 2009_06, Department of Economics, University of Macedonia, revised Mar 2009. [Downloadable!]
  16. Farm, Ante, 2009. "Market Sharing and Price Leadership," Working Paper Series 3/2009, Swedish Institute for Social Research. [Downloadable!]
  17. Christopher R. Knittel & Jason J. Lepore, 2006. "Tacit Collusion in the Presence of Cyclical Demand and Endogenous Capacity Levels," NBER Working Papers 12635, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Peter Eso & Volker Nocke & Lucy White, 2007. "Competition for Scarce Resources," Economics Series Working Papers 365, University of Oxford, Department of Economics. [Downloadable!]
  19. Erdem Basci & Ismail Saðlam, 2001. "Bertrand-Edgeworth Equilibrium in a Cash-Advance Economy," Departmental Working Papers 0104, Bilkent University, Department of Economics. [Downloadable!]
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