Sequential capacity and price choices in a duopoly model with demand uncertainty (Q910316): Difference between revisions
From MaRDI portal
Added link to MaRDI item. |
Set profile property. |
||
Property / MaRDI profile type | |||
Property / MaRDI profile type: MaRDI publication profile / rank | |||
Normal rank |
Revision as of 02:35, 5 March 2024
scientific article
Language | Label | Description | Also known as |
---|---|---|---|
English | Sequential capacity and price choices in a duopoly model with demand uncertainty |
scientific article |
Statements
Sequential capacity and price choices in a duopoly model with demand uncertainty (English)
0 references
1990
0 references
The paper analyses the effect of demand uncertainty in a two-stage duopoly model where firms first choose capacity, then price and shows that the equilibrium is sensitive to the decision structure of the model. If both the capacity choice and the price choice are made simultaneously no pure strategy equilibrium exists. If prices are chosen sequentially, the pricing stage has two pure strategy equilibria, but only for one of these does a pure strategy equilibrium of the full game exist. Finally, if both capacities and prices are chosen sequentially, a pure strategy equilibrium with strong first mover advantages exists.
0 references
demand uncertainty
0 references
two-stage duopoly model
0 references
pure strategy equilibrium
0 references