Quantity-setting competition with differentiated goods under uncertain demand

Ferreira, Fernanda A.; Ferreira, Flávio

http://hdl.handle.net/10400.22/4390

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Authors

Ferreira, Fernanda A.

Ferreira, Flávio

Abstract(s)

We consider a quantity-setting duopoly model, and we study the decision to move first or second, by assuming that the firms produce differentiated goods and that there is some demand uncertainty. The competitive phase consists of two periods, and in either period, the firms can make a production decision that is irreversible. As far as the firms are allowed to choose (non-cooperatively) the period they make the decision, we study the circumstances that favour sequential rather than simultaneous decisions.