Strategic inventories under limited commitment
Fabio Antoniou () and
Raffaele Fiocco ()
Working Papers from Universitat Rovira i Virgili, Department of Economics
In a dynamic storable good market where demand changes over time, we investigate the producer's strategic incentives to hold inventories in response to the possibility of buyer stockpiling. The literature on storable goods has demonstrated that buyer stockpiling in anticipation of higher future prices harms the producer's profi tability, particularly when the producer cannot commit to future prices. We show that the producer's inventories act as a strategic device to mitigate the loss from the lack of commitment. Our results provide a rationale for the producer's inventory behavior that sheds new light on the well-documented empirical evidence about inventories. Keywords: buyer stockpiling, commitment, storable goods, strategic inventories. JEL Classifi cation: D21, D42, L12.
Keywords: Conducta organitzacional; Monopolis; 338 - Situació econòmica. Política econòmica. Gestió; control i planificació de l'economia. Producció. Serveis. Turisme. Preus (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Strategic inventories under limited commitment (2019)
Working Paper: Strategic inventories under limited commitment (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/306512
Access Statistics for this paper
More papers in Working Papers from Universitat Rovira i Virgili, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Ariadna Casals ().