Corvinus
Corvinus

Endogenous choice of decision variables

Tasnádi, Attila (2012) Endogenous choice of decision variables. Pure mathematics and applications, 23 (1). pp. 67-79.

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Abstract

In this paper we allow the firms to choose their prices and quantities simultaneously. Quantities are produced in advance and their common sales price is determined by the market. Firms offer their “residual capacities” at their announced prices and the corresponding demand will be served to order. If all firms have small capacities, we obtain the Bertrand solution; while if at least one firm has a sufficiently large capacity, the Cournot outcome and a model of price leadership could emerge.

Item Type:Article
Uncontrolled Keywords:Cournot, Bertrand-Edgeworth, Price Leadership, JEL codes: D43, L13
Subjects:Mathematics, Econometrics
Funders:Lendület Fiatal Kutatói Program / Momentum Program of the Hungarian Academy of Sciences
Projects:OTKA K-101224
ID Code:779
Deposited By: Ádám Hoffmann
Deposited On:02 Aug 2012 08:00
Last Modified:05 Dec 2012 12:27

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