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Endogenous Timing In A Mixed Duopoly With Capacity Choice

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  • JUAN CARLOS BÁRCENA-RUIZ
  • MARIA BEGOÑA GARZÓN

Abstract

An endogenous order of moves is analyzed in a mixed duopoly where firms first strategically choose their capacity levels and then compete at price level. In equilibrium, firms are shown to set prices simultaneously while capacities are chosen sequentially. This result is in contrast to the assumption of simultaneous order of moves for capacities choice made by Bárcena-Ruiz and Garzón (Economics Bulletin, Vol. 12 (2007), pp. 1-7) in a mixed duopoly. Besides, we find that there are two equilibria: in one of them the public firm is the leader in capacities and, in the other, the follower. Copyright © 2010 The Authors. Journal compilation © 2010 Blackwell Publishing Ltd and The University of Manchester.

Suggested Citation

  • Juan Carlos Bárcena-Ruiz & Maria Begoña Garzón, 2010. "Endogenous Timing In A Mixed Duopoly With Capacity Choice," Manchester School, University of Manchester, vol. 78(2), pages 93-109, March.
  • Handle: RePEc:bla:manchs:v:78:y:2010:i:2:p:93-109
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    References listed on IDEAS

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    1. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
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    8. Steve Dowrick, 1986. "von Stackelberg and Cournot Duopoly: Choosing Roles," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 251-260, Summer.
    9. Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
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    Cited by:

    1. Rupayan Pal, 2010. "How much should you own? Cross-ownership and privatization," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-015, Indira Gandhi Institute of Development Research, Mumbai, India.
    2. José Naya, 2015. "Endogenous timing in a mixed duopoly model," Journal of Economics, Springer, vol. 116(2), pages 165-174, October.
    3. Lin, Ming Hsin & Matsumura, Toshihiro, 2017. "Optimal Privatization and Uniform Subsidy Policies: A Synthesis," MPRA Paper 77285, University Library of Munich, Germany.

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