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Simultaneous vs. sequential price competition with incomplete information

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  • Arozamena, Leandro
  • Weinschelbaum, Federico

Abstract

We compare equilibria with sequential and simultaneous moves under homogeneous-good Bertrand competition when unit costs are private information. Under an alternative interpretation, we examine the consequences of awarding a right of first refusal in a first-price procurement auction with endogenous quantity.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 104 (2009)
Issue (Month): 1 (July)
Pages: 23-26

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Handle: RePEc:eee:ecolet:v:104:y:2009:i:1:p:23-26

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Oligopoly Auctions with endogenous quantity Right of first refusal Second-mover advantage;

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References

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  1. repec:ebl:ecbull:v:4:y:2006:i:24:p:1-5 is not listed on IDEAS
  2. Grosskopf, Brit & Roth, Alvin E., 2009. "If You are Offered the Right of First Refusal, Should You Accept? An Investigation of Contract Design," Scholarly Articles 4261988, Harvard University Department of Economics.
  3. Damme, E.E.C. van & Hurkens, J.P.M., 1996. "Endogenous Stackelberg Leadership," Discussion Paper 1996-115, Tilburg University, Center for Economic Research.
  4. Spulber, Daniel F, 1995. "Bertrand Competition When Rivals' Costs Are Unknown," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 1-11, March.
  5. Amir, Rabah & Stepanova, Anna, 2006. "Second-mover advantage and price leadership in Bertrand duopoly," Games and Economic Behavior, Elsevier, vol. 55(1), pages 1-20, April.
  6. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
  7. Federico Weinschelbaum & Leandro Arozamena, 2006. "A Note on the Suboptimality of Right-of-First-Refusal Clauses," Working Papers 92, Universidad de San Andres, Departamento de Economia, revised Jul 2006.
  8. Robert G. Hansen, 1988. "Auctions with Endogenous Quantity," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 44-58, Spring.
  9. Roberto Burguet & Martin K. Perry, 2003. "Preferred Suppliers and Vertical Integration in Auction Market," Working Papers 74, Barcelona Graduate School of Economics.
  10. Federico Weinschelbaum & Leandro Arozamena, 2004. "The Effect of Corruption on Bidding Behavior in First-Price Auctions," Econometric Society 2004 Latin American Meetings 180, Econometric Society.
  11. Steve Dowrick, 1986. "von Stackelberg and Cournot Duopoly: Choosing Roles," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 251-260, Summer.
  12. J. Riley & E. Maskin, 1981. "Optimal Auctions with Risk Averse Buyers," Working papers 311, Massachusetts Institute of Technology (MIT), Department of Economics.
  13. Bagnoli, M. & Bergstrom, T., 1989. "Log-Concave Probability And Its Applications," Papers 89-23, Michigan - Center for Research on Economic & Social Theory.
  14. Lofaro, Andrea, 2002. "On the efficiency of Bertrand and Cournot competition under incomplete information," European Journal of Political Economy, Elsevier, vol. 18(3), pages 561-578, September.
  15. Mailath George J., 1993. "Endogenous Sequencing of Firm Decisions," Journal of Economic Theory, Elsevier, vol. 59(1), pages 169-182, February.
  16. Kyle Bagwell, 1992. "Commitment and Observability in Games," Discussion Papers 1014, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  17. Gal-Or, Esther, 1985. "First Mover and Second Mover Advantages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 649-53, October.
  18. Amir, Rabah & Grilo, Isabel, 1999. "Stackelberg versus Cournot Equilibrium," Games and Economic Behavior, Elsevier, vol. 26(1), pages 1-21, January.
  19. Bikhchandani Sushil & Lippman Steven A. & Ryan Reade, 2005. "On the Right-of-First-Refusal," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 5(1), pages 1-44, April.
  20. Gal-Or, Esther, 1986. "Information Transmission-Cournot and Bertrand Equilibria," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 85-92, January.
  21. Anderson, Simon P. & Engers, Maxim, 1992. "Stackelberg versus Cournot oligopoly equilibrium," International Journal of Industrial Organization, Elsevier, vol. 10(1), pages 127-135, March.
  22. Dastidar, Krishnendu Ghosh, 2004. "On Stackelberg games in a homogeneous product market," European Economic Review, Elsevier, vol. 48(3), pages 549-562, June.
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Citations

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Cited by:
  1. Johan N.M. Lagerlöf, 2013. "Does Cost Uncertainty in the Bertrand Model Soften Competition?," Discussion Papers 14-08, University of Copenhagen. Department of Economics.
  2. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2009. "Sequential Spatial Competition in Vertically Related industries with Different Product Varieties," MPRA Paper 19278, University Library of Munich, Germany.
  3. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Cross-border Merger, Vertical Structure, and Spatial Competition," MPRA Paper 24474, University Library of Munich, Germany.

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