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Inventories and Endogenous Stackelberg Leadership in Two-period Cournot Oligopoly

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  • Mitraille, Sébastien
  • Moreaux, Michel

Abstract

Two-period Cournot competition between n identical firms producing at constant marginal cost and able to store before selling has pure strategy Nash-perfect equilibria, in which some firms store to exert endogenously a leadership over rivals. The number of firms storing balances market share gains, obtained by accumulating early the output, with losses in margin resulting from increased sales and higher operation costs. This number and the industry inventories are non monotonic in n. Concentration (HHI) and aggregate sales increase due to the strategic use of inventories.

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Bibliographic Info

Paper provided by LERNA, University of Toulouse in its series LERNA Working Papers with number 11.15.349.

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Date of creation: Jul 2011
Date of revision: Feb 2012
Handle: RePEc:ler:wpaper:24806

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