Do Firms Always Choose Excess Capacity?

Hikaru Ogawa and Akira Nishimori (nisimori@vega.aichi-u.ac.jp)
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Akira Nishimori: Aichi University

Economics Bulletin, 2004, vol. 12, issue 2, 1-7

Abstract: We analyze the capacity choice of firms in a long-run mixed oligopoly market, in which firms decide not only production quantity but also capacity scale. Our main purpose is to show that while a profit-maximizing firm maintains over capacity as a strategic device, a firm pursuing non-pure profit chooses under capacity.

JEL-codes: L1 L3 (search for similar items in EconPapers)
Date: 2004-01-15
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Citations: View citations in EconPapers (32)

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