Elastic demand, sunk costs and the Kreps-Scheinkman extension of the Cournot model
AbstractThe paper shows that, with any rationing mechanism between the efficient and proportional extremes, the Kreps-Scheinkman two-stage quantity-price game reduces to the Cournot model if demand is uniformly elastic and if all costs are sunk at the first stage, thus providing positive results to set against existing negative statements.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 12 (1998)
Issue (Month): 1 ()
Note: Received: May 24, 1995; revised version: March 6, 1997
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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- Peter Neary & Joe Tharakan, 2011.
"International Trade with Endogenous Mode of Competition in General Equilibrium,"
CREPP Working Papers
1111, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
- Neary, J. Peter & Tharakan, Joe, 2012. "International trade with endogenous mode of competition in general equilibrium," Journal of International Economics, Elsevier, vol. 86(1), pages 118-132.
- NEARY, J. Peter & THARAKAN, Joe, . "International trade with endogenous mode of competition in general equilibrium," CORE Discussion Papers RP -2430, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Neary, J Peter & Tharakan, Joe, 2006.
"Endogenous Mode of Competition in General Equilibrium,"
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5943, C.E.P.R. Discussion Papers.
- J Peter Neary & Joe Tharakan, 2005. "Endogenous Mode of Competition in General Equilibrium," Working Papers 200526, School Of Economics, University College Dublin.
- Pedro Jara-Moroni, 2008. "The Cournot outcome as the result of price competition," Working Papers halshs-00587866, HAL.
- Nicolas Gruyer, 2009. "A note on quantity precommitment, cournot outcome and asymmetric capacity costs," Economics Bulletin, AccessEcon, vol. 29(1), pages 384-391.
- Wu, Xin-wang & Zhu, Quan-tao & Sun, Laixiang, 2012. "On equivalence between Cournot competition and the Kreps–Scheinkman game," International Journal of Industrial Organization, Elsevier, vol. 30(1), pages 116-125.
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