ENDOGENOUS TIMING IN A MIXED DUOPOLY AND PRIVATE DUOPOLY –‘CAPACITY‐THEN‐QUANTITY’ GAME: THE LINEAR DEMAND CASE*

Yuanzhu Lu () and Sougata Poddar ()

Australian Economic Papers, 2009, vol. 48, issue 2, 138-150

Abstract: We consider a game of endogenous timing of sequential choice of capacity and quantity with observable delay in a mixed duopoly and a private duopoly. In mixed duopoly, we find that a simultaneous play at the capacity stage or at the quantity stage can never be supported as subgame perfect Nash equilibrium (SPNE); whereas a simultaneous play at each stage turns out to be the unique SPNE in a private duopoly. In mixed duopoly there is multiplicity of equilibria and all SPNEs require sequentiality at the capacity as well as quantity stage.

Date: 2009
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https://doi.org/10.1111/j.1467-8454.2009.00369.x

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