"Capacity precommitment and price competition yield Cournot outcomes "

• Autores: Diego Moreno, Luis Úbeda
• Localización: Documentos de trabajo. Economic series ( Universidad Carlos III. Departamento de Economía ), Nº. 44, 2001
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • We study an industry of a homogeneous good where n firms with identical technology compete by first building capacity, and then, after observing the capacity decisions, choosing a ¿reservation price¿ at which they are willing to sell their entire capacities. We show that every pure strategy equilibrium yields the Cournot outcome, and that the Cournot outcome can be sustained by a pure strategy subgame perfect equilibrium.