Capital Recommitment and Competition in Supply Schedules
AbstractAlthough the Cournot and Bertrand equilibrium concepts have dominated economic analysis of oligopoly problems, neither has a compelling theoretical rationale. However, notions of capacity commitment have been used to rationalize the Cournot equilibrium. At the same time, the idea of competition in supply schedules under uncertainty has been used by Paul D. Klemperer and Margaret A. Meyer (1989) to derive an equilibrium concept intermediate between Cournot and Bertrand. In this paper, the authors combine these two approaches and show that under the assumptions of Cobb-Douglas technology and constant elasticity demand, an equilibrium in markups can result. Copyright 1996 by Blackwell Publishing Ltd.
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Bibliographic InfoPaper provided by Australian National University - Department of Economics in its series Papers with number 280.
Length: 17 pages
Date of creation: 1994
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Postal: THE AUSTRALIAN NATIONAL UNIVERSITY, DEPARTMENT OF ECONOMICS, RESEARCH SCHOOL of PACIFIC STUDIES, RESEARCH SCHOOL OF SOCIAL SCIENCES, G.P.O. 4, CANBERRA ACT 2601 AUSTRALIA..O. BOX 4 CANBERRA 2601 AUSTRALIA.
Web page: http://economics.anu.edu.au/economics.htm
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economic models ; competition ; game theory;
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- Grant, Simon & Quiggin, John, 1996. "Capital Precommitment and Competition in Supply Schedules," Journal of Industrial Economics, Wiley Blackwell, vol. 44(4), pages 427-41, December.
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