Premium
Inventories and Endogenous Stackelberg Leadership in Two‐Period Cournot Oligopoly
Author(s) -
Mitraille Sébastien,
Moreaux Michel
Publication year - 2013
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12031
Subject(s) - cournot competition , stackelberg competition , oligopoly , microeconomics , economics , margin (machine learning) , marginal cost , competition (biology) , aggregate (composite) , industrial organization , ecology , machine learning , computer science , biology , materials science , composite material
Two‐period Cournot competition between n identical firms producing at constant marginal cost and able to store before selling has pure strategy Nash‐perfect equilibria, in which some firms store to exert endogenously a leadership over rivals. The number of firms storing balances market share gains, obtained by accumulating early the output, with losses in margin resulting from increased sales and higher operation costs. This number and the industry inventories are nonmonotonic in n. Concentration (HHI) and aggregate sales increase due to the strategic use of inventories.