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Mixed duopolies with advance production

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  • Balogh, Tamás László
  • Tasnádi, Attila

Abstract

Production to order and production in advance have been compared in many frameworks. In this paper we investigate a production in advance version of the capacityconstrained Bertrand-Edgeworth mixed duopoly game and determine the solution of the respective timing game. We show that a pure-strategy (subgame-perfect) Nashequilibrium exists for all possible orderings of moves. It is pointed out that unlike the production-to-order case, the equilibrium of the timing game lies at simultaneous moves. An analysis of the public firm's impact on social surplus is also carried out. All the results are compared with those of the production-to order version of the respective game and with those of the mixed duopoly timing games.

Suggested Citation

  • Balogh, Tamás László & Tasnádi, Attila, 2018. "Mixed duopolies with advance production," Corvinus Economics Working Papers (CEWP) 2018/08, Corvinus University of Budapest.
  • Handle: RePEc:cvh:coecwp:2018/08
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    File URL: http://unipub.lib.uni-corvinus.hu/3811/
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    Keywords

    Bertrand-Edgeworth; mixed duopoly; timing games;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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