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Endogenous Timing In A Mixed Duopoly And Private Duopoly –‘Capacity‐Then‐Quantity’ Game: The Linear Demand Case

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  • YUANZHU LU
  • SOUGATA PODDAR

Abstract

We consider a game of endogenous timing of sequential choice of capacity and quantity with observable delay in a mixed duopoly and a private duopoly. In mixed duopoly, we find that a simultaneous play at the capacity stage or at the quantity stage can never be supported as subgame perfect Nash equilibrium (SPNE); whereas a simultaneous play at each stage turns out to be the unique SPNE in a private duopoly. In mixed duopoly there is multiplicity of equilibria and all SPNEs require sequentiality at the capacity as well as quantity stage.

Suggested Citation

  • Yuanzhu Lu & Sougata Poddar, 2009. "Endogenous Timing In A Mixed Duopoly And Private Duopoly –‘Capacity‐Then‐Quantity’ Game: The Linear Demand Case," Australian Economic Papers, Wiley Blackwell, vol. 48(2), pages 138-150, June.
    • Handle: RePEc:bla:ausecp:v:48:y:2009:i:2:p:138-150
    DOI: 10.1111/j.1467-8454.2009.00369.x
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    References listed on IDEAS

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    Cited by:

    1. Dong, Quan & Bárcena-Ruiz, Juan Carlos, 2015. "Does investment in capacity encourage FDI?," Economic Modelling, Elsevier, vol. 51(C), pages 58-64.
    2. Sang-Ho Lee & Timur K. Muminov, 2021. "Endogenous Timing of R&D Decisions and Privatization Policy with Research Spillovers," Journal of Industry, Competition and Trade, Springer, vol. 21(4), pages 505-525, December.
    3. Ohnishi, Kazuhiro, 2024. "Endogenous timing in a mixed triopoly with state-owned, labour-managed and capitalist firms," MPRA Paper 123007, University Library of Munich, Germany.
    4. Ohnishi, Kazuhiro, 2019. "Capacity choice in an international mixed triopoly," MPRA Paper 94051, University Library of Munich, Germany.
    5. Kazuhiro Ohnishi, 2013. "A Two-production-period Model with State-owned and Labour-managed Firms," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(1), pages 41-56, April.
    6. Kazuhiro Ohnishi, 2019. "Capacity choice in an international mixed triopoly," Working Papers e140, Tokyo Center for Economic Research.
    7. Akio Kawasaki & Takao Ohkawa & Makoto Okamura, 2020. "Endogenous timing game in a mixed duopoly with partial foreign ownership and asymmetric increasing marginal costs," Australian Economic Papers, Wiley Blackwell, vol. 59(2), pages 71-87, June.
    8. Nakamura, Yasuhiko, 2014. "Capacity choice in a duopoly with a consumer-friendly firm and an absolute profit-maximizing firm," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 105-117.
    9. Ohnishi, Kazuhiro, 2018. "Stackelberg Mixed Triopoly Games with State-Owned, Labour-Managed and Capitalist Firms," MPRA Paper 88222, University Library of Munich, Germany.
    10. Tamás Balogh & Attila Tasnádi, 2012. "Does timing of decisions in a mixed duopoly matter?," Journal of Economics, Springer, vol. 106(3), pages 233-249, July.
    11. Sang-Ho Lee & Lili Xu, 2018. "Endogenous timing in private and mixed duopolies with emission taxes," Journal of Economics, Springer, vol. 124(2), pages 175-201, June.
    12. Arturo García & Mariel Leal & Sang-Ho Lee, 2019. "Endogenous Timing with a Socially Responsible Firm," Korean Economic Review, Korean Economic Association, vol. 35, pages 345-370.
    13. Ohnishi, Kazuhiro, 2023. "Endogenous timing in an international mixed duopoly with a foreign labor-managed competitor," MPRA Paper 118561, University Library of Munich, Germany.
    14. Luciano Fanti & Nicola Meccheri, 2017. "Unionization Regimes, Capacity Choice by Firms and Welfare Outcomes," Manchester School, University of Manchester, vol. 85(6), pages 661-681, December.
    15. Kangsik Choi & DongJoon Lee, 2020. "Do firms choose overcapacity or undercapacity in a vertical structure?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(5), pages 839-847, July.
    16. Ohnishi, Kazuhiro, 2018. "Inventory Holding and a Mixed Duopoly with a Foreign Joint-Stock Firm," MPRA Paper 88223, University Library of Munich, Germany.
    17. Kazuhiro Ohnishi, 2014. "Sequential Mixed Competition with a Foreign Joint-stock Firm," International Journal of Social Sciences and Management Studies (IJSSMS), The Economics and Social Development Organization (TESDO), vol. 1(2), pages 38-52, June.
    18. Pu-yan Nie, 2014. "Effects of capacity constraints on mixed duopoly," Journal of Economics, Springer, vol. 112(3), pages 283-294, July.

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