Inventories and Endogenous Stackelberg Leadership in Two‐Period Cournot Oligopoly

23 Pages Posted: 15 Nov 2013

See all articles by Sebastien Mitraille

Sebastien Mitraille

Toulouse Business School

Michel Moreaux

Institut Universitaire de France

Date Written: Winter 2013

Abstract

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.

Suggested Citation

Mitraille, Sebastien and Moreaux, Michel, Inventories and Endogenous Stackelberg Leadership in Two‐Period Cournot Oligopoly (Winter 2013). Journal of Economics & Management Strategy, Vol. 22, Issue 4, pp. 852-874, 2013, Available at SSRN: https://ssrn.com/abstract=2354744 or http://dx.doi.org/10.1111/jems.12031

Sebastien Mitraille (Contact Author)

Toulouse Business School ( email )

Toulouse
France
+33 (0)561294844 (Phone)
+33 (0)561294994 (Fax)

Michel Moreaux

Institut Universitaire de France ( email )

103, bld Saint-Michel
75005 Paris
France

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