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A Quantity-Setting Mixed Duopoly with Inventory Investment as a Coordination Device

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  • Kazuhiro Ohnishi

    (Osaka University and Institute for Basic Economic Science)

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    Abstract

    This paper examines a two-period mixed market model in which a welfaremaximizing public firm and a profit-maximizing private firm can use inventory investment as a strategic device. It is then demonstrated that the equilibrium in the second period coincides with the Stackelberg solution where the private firm is the leader, and at equilibrium, both social welfare and the private firm¡¯s profit are higher than in the game without inventory.

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    Bibliographic Info

    Article provided by Society for AEF in its journal Annals of Economics and Finance.

    Volume (Year): 12 (2011)
    Issue (Month): 1 (May)
    Pages: 109-119

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    Handle: RePEc:cuf:journl:y:2011:v:12:i:1:p:109-119

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    Keywords: Mixed duopoly; Public firm; Private firm; Inventory investment;

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