A Competitive Duopoly in Which Information Spillovers Can Be Mutually Advantageous
Type de matériel :
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This paper examines the production strategies of firms in a duopoly market of homogenous products characterized by quantity competition. Demand is only partially known to firms and they are able to produce as much as they wish before market demand is met. We will show that in this type of game, the nature of the equilibrium depends on the extent of information spillovers between the leader and the follower. A Pareto dominant sequential entry may sometimes occur. Therefore, information spillovers may be enough to avoid the traditional depletion of the leader’s income.
Réseaux sociaux