The Choice of Prices vs. Quantities under Uncertainty

Markus Reisinger and Ludwig Ressner

No 7, Working Papers from Bavarian Graduate Program in Economics (BGPE)

Abstract: If duopolistic firms can choose their strategy variable, uncertainty about demand conditions and the degree of substitutability have countervailing effects on variable choice. High uncertainty favors prices, while close substitutability favors quantities. For intermediate values, a hybrid equilibrium exists.

Keywords: Competition; Strategy Variables; Demand Uncertainty (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2006-10
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https://www.bgpe.de/files/2024/05/007_Ressner.pdf First version, 2006 (application/pdf)

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