Production targets

• 成果类型: Article
• 署名作者: Caruana, Guillermo; Einav, Liran
• 署名单位: Stanford University; National Bureau of Economic Research
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2008.00047.x
• 发表日期: 2008
• 页码: 990-1017
• 关键词: dynamic oligopoly; adjustment costs; COMPETITION; duopoly; games; nash; INVESTMENT; COMMITMENT; MARKET

摘要

We analyze a dynamic model of quantity competition, where firms continuously adjust their quantity targets, but incur convex adjustment costs when they do so. Quantity targets serve as a partial commitment device and, in equilibrium, follow a hump-shaped pattern. The final equilibrium is more competitive than in the static analog. We then use data on monthly production targets of the Big Three U.S. auto manufacturers and show a similar empirical hump-shaped dynamic pattern. Taken together, this suggests that strategic considerations may play a role in setting auto production schedules, and that static models may misestimate the industry's competitiveness.