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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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Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 12-322.

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Date of creation: Feb 2012
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Handle: RePEc:tse:wpaper:26045

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