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Demand fluctuations and capacity utilization under duopoly
| Content Provider | Semantic Scholar |
|---|---|
| Author | Gabszewicz, Jean J. Poddar, Sougata |
| Copyright Year | 1997 |
| Abstract | Summary. This paper studies the impact of uncertain demand on firms’ capacity decisions when they operate in an oligopolistic environment. We define a two-stage game where firms choose capacity in the first stage without knowing which state of Nature is going to realize, and output levels in the second, knowing which state is realized. We prove the existence of a symmetric subgame perfect equilibrium at which firms are in excess capacity compared with the capacity they would choose in the Cournot certainty equivalent game. |
| Starting Page | 131 |
| Ending Page | 146 |
| Page Count | 16 |
| File Format | PDF HTM / HTML |
| DOI | 10.1007/s001990050150 |
| Alternate Webpage(s) | https://digitalcommons.chapman.edu/cgi/viewcontent.cgi?article=1230&context=economics_articles |
| Alternate Webpage(s) | https://doi.org/10.1007/s001990050150 |
| Volume Number | 10 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
