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On Supply Function Equilibria in a Mixed Duopoly

Author

Listed:
  • Carlos, Gutiérrez-Hita

    (Departamento de Estudios Económicos y Financieros)

  • Vicente-Pérez, José

    (Departamento Fundamentos Análisis Económico)

Abstract

In this paper we present a mixed duopoly model of supply function competition under uncertainty with product differentiation. We find that, regardless the nature of product heterogeneity, the best response of the private firm always arises as strategic complement. Contrary to this, state-owned firm's best response arises either as strategic complement or substitute depending on the product heterogeneity. As a result of the ex post realization of the demand uncertainty, different equilibria are reached.

Suggested Citation

  • Carlos, Gutiérrez-Hita & Vicente-Pérez, José, 2018. "On Supply Function Equilibria in a Mixed Duopoly," QM&ET Working Papers 18-1, University of Alicante, D. Quantitative Methods and Economic Theory.
    • Handle: RePEc:ris:qmetal:2018_001
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    References listed on IDEAS

    as
    1. Ciarreta, Aitor & Gutierrez-Hita, Carlos, 2006. "Supply function vs. quantity competition in supergames," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 773-783, July.
    2. Delbono, Flavio & Lambertini, Luca, 2015. "On the properties of linear supply functions in oligopoly," Economics Letters, Elsevier, vol. 136(C), pages 22-24.
    3. Paul Klemperer & Margaret Meyer, 1986. "Price Competition vs. Quantity Competition: The Role of Uncertainty," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 618-638, Winter.
    4. Ghosh, Arghya & Mitra, Manipushpak, 2010. "Comparing Bertrand and Cournot in mixed markets," Economics Letters, Elsevier, vol. 109(2), pages 72-74, November.
    5. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    6. Junichi Haraguchi & Toshihiro Matsumura, 2016. "Cournot–Bertrand comparison in a mixed oligopoly," Journal of Economics, Springer, vol. 117(2), pages 117-136, March.
    7. de Fraja, Giovanni & Delbono, Flavio, 1990. "Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
    8. Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-1277, November.
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    More about this item

    Keywords

    Supply Function Equilibria; Mixed oligopoly; Differentiated products;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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