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Multi-market Oligopoly with Production before Sales

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  • Anderson, Simon P
  • Fischer, Ronald D

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.

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  • Anderson, Simon P & Fischer, Ronald D, 1989. "Multi-market Oligopoly with Production before Sales," Journal of Industrial Economics, Wiley Blackwell, vol. 38(2), pages 167-182, December.
    • Handle: RePEc:bla:jindec:v:38:y:1989:i:2:p:167-82
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    Cited by:

    1. Tse, Chung Yi, 2001. "Risky quality choice," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 185-212, January.

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