Capacity and Reaction Functions of Joint-Stock Firms
Publish place: International Journal of Management, Accounting and Economics (IJMAE)، Vol: 3، Issue: 3
Publish Year: 1395
نوع سند: مقاله ژورنالی
زبان: English
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شناسه ملی سند علمی:
JR_IJMAE-3-3_002
تاریخ نمایه سازی: 7 اسفند 1395
Abstract:
This paper investigates two-stage competition with two joint-stock firms. In the first stage, each firm independently chooses a level of capacity. In the second stage, each firm independently chooses an output. The paper shows that each firm’s reaction function has a kink at its installed capacity level. In addition, the paper considers interactions between a joint-stock incumbent and a potential joint-stock entrant as well as a pair of established joint-stock firms. The paper demonstrates that there exist cases in which the joint-stock incumbent can deter entry by the potential joint-stock entrant.
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Authors
Kazuhiro Ohnishi
Institute for Basic Economic Science, Osaka, Japan