Multi-market Oligopoly with Production before Sales

Simon Anderson and Ronald Fischer

Journal of Industrial Economics, 1989, vol. 38, issue 2, 167-82

Abstract: When production takes place before firms allocate output to different markets, the equilibrium may be different from the one corresponding to simultaneous production and allocation decisions. The difference arises when firms account for the output-shifting effect their own production levels have on the allocation decisions of rivals. The authors determine conditions under which the two equilibria are different and indicate the direction of change from the simultaneous equilibrium. Applying the model to reciprocal dumping ($2B la Brander-Krugman 1983), the condition reduces to the concavity or convexity of demand. Copyright 1989 by Blackwell Publishing Ltd.

Date: 1989
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