Kreps & Scheinkman with Product Differentiation

doi:10.3868/s060-008-019-0011-4

Front. Econ. China

2019, Vol. 14

Issue (2) : 203-219 https://doi.org/10.3868/s060-008-019-0011-4

Orginal Article

Kreps & Scheinkman with Product Differentiation

Stephen Martin(

)

Department of Economics, Purdue University, West Lafayette, IN 47906, USA

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Abstract

Kreps and Scheinkman (1983)’s celebrated result is that in a two-stage model of a market with homogeneous products in which firms noncooperatively pick capacities in the first stage and set prices in the second stage, the equilibrium outcome is that of a one-shot Cournot game. This note derives capacity best response functions for the first stage and extends the Kreps and Scheinkman result to the case of differentiated products.

Keywords Kreps and Scheinkman capacity choice Cournot oligopoly product differentiation

Issue Date: 17 July 2019

Cite this article:

Stephen Martin. Kreps & Scheinkman with Product Differentiation[J]. Front. Econ. China, 2019, 14(2): 203-219.

URL:

https://academic.hep.com.cn/fec/EN/10.3868/s060-008-019-0011-4
https://academic.hep.com.cn/fec/EN/Y2019/V14/I2/203

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