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A note on quantity precommitment, cournot outcome and asymmetric capacity costs

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  • Nicolas Gruyer

    () (LEEA-ENAC Toulouse)

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    Abstract

    This paper extends Kreps and Scheinkman's 1983 result, which shows that a production capacity choice stage followed by price competition yields the same outcome as a Cournot game, to a setting where capacity costs are asymmetric.

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I1-P40.pdf
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    Bibliographic Info

    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 29 (2009)
    Issue (Month): 1 ()
    Pages: 384-391

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    Handle: RePEc:ebl:ecbull:eb-08l10042

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    Related research

    Keywords: Asymmetric costs;

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    1. Dan Kovenock & Raymond Deneckere & Tom Faith & Beth Allen, 2000. "Capacity precommitment as a barrier to entry: A Bertrand-Edgeworth approach," Economic Theory, Springer, vol. 15(3), pages 501-530.
    2. Paul Madden, 1998. "Elastic demand, sunk costs and the Kreps-Scheinkman extension of the Cournot model," Economic Theory, Springer, vol. 12(1), pages 199-212.
    3. Dan Kovenock & Raymond J. Deneckere, 1996. "Bertrand-Edgeworth duopoly with unit cost asymmetry (*)," Economic Theory, Springer, vol. 8(1), pages 1-25.
    4. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
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