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 leader- ship over rivals. The number of firms storing balances market share gains, obtained by accumulating early the output, with losses in margin resulting from increased competition and higher operation costs. This number and the industry inventories are non monotonic in n. Concentration (HHI) and competition increase due to the strategic use of inventories.
JEL codes
- D43: Oligopoly and Other Forms of Market Imperfection
- L13: Oligopoly and Other Imperfect Markets
Reference
Sébastien Mitraille, and Michel Moreaux, “Inventories and Endogenous Stackelberg Leadership in Two-period Cournot Oligopoly”, TSE Working Paper, n. 11-249, July 27, 2011.
See also
Published in
TSE Working Paper, n. 11-249, July 27, 2011