A Quantity-Setting Mixed Duopoly with Inventory Investment as a Coordination Device
نویسندگان
چکیده
This paper examines a two-period mixed market model in which a welfaremaximizing public firm and a profit-maximizing private firm can use inventory investment as a strategic device. It is then demonstrated that the equilibrium in the second period coincides with the Stackelberg solution where the private firm is the leader, and at equilibrium, both social welfare and the private firm’s profit are higher than in the game without inventory.
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