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Endogenous timing with infinitely many firms

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  • Tesoriere, Antonio

Abstract

A model with constant marginal costs is considered where firms choose first a period for production and then the amount to produce when competing in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry output configurations encompassing one limit-output dominant firm and the Cournot equilibrium with free entry as extreme cases. At each of these equilibria a firm produces a positive amount only if this firm commits to produce at period one. Both Stackelberg and Cournot-like outcomes are sustainable as equilibria however. When the number of leaders is given, production at subsequent periods is always prevented, and industry output is sometimes larger than the entry preventing level.

Suggested Citation

  • Tesoriere, Antonio, 2008. "Endogenous timing with infinitely many firms," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1381-1388, November.
  • Handle: RePEc:eee:indorg:v:26:y:2008:i:6:p:1381-1388
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    References listed on IDEAS

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    Cited by:

    1. Federico Etro, 2014. "The Theory Of Endogenous Market Structures," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 804-830, December.
    2. Etro, Federico, 2011. "Endogenous market structures and contract theory: Delegation, principal-agent contracts, screening, franchising and tying," European Economic Review, Elsevier, vol. 55(4), pages 463-479, May.
    3. Attila Tasnádi, 2010. "Quantity-setting games with a dominant firm," Journal of Economics, Springer, vol. 99(3), pages 251-266, April.
    4. Etro, Federico, 2016. "Research in economics and industrial organization," Research in Economics, Elsevier, vol. 70(4), pages 511-517.
    5. Tesoriere, Antonio, 2017. "Stackelberg equilibrium with many leaders and followers. The case of zero fixed costs," Research in Economics, Elsevier, vol. 71(1), pages 102-117.
    6. repec:eee:mateco:v:73:y:2017:i:c:p:86-102 is not listed on IDEAS
    7. Federico Etro, 2010. "Endogenous market structures and antitrust policy," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(1), pages 9-45, March.

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