All-Pay Oligopolies: Price Competition with Unobservable Inventory Choices

• 成果类型: Article
• 署名作者: Montez, Joao; Schutz, Nicolas
• 署名单位: University of Lausanne; Centre for Economic Policy Research - UK; University of Mannheim; University of Mannheim
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdaa085
• 发表日期: 2021
• 页码: 2407-2438
• 关键词: bertrand competition; imperfect competition; asymmetric contests; returns policies; equilibrium; INFORMATION; MODEL; cournot; COSTS; BEHAVIOR

摘要

We study production in advance in a setting where firms first source inventories that remain unobservable to rivals, and then simultaneously set prices. In the unique equilibrium, each firm occasionally holds a sale relative to its reference price, resulting in firms sometimes being left with unsold inventory. In the limit as inventory costs become fully recoverable, the equilibrium converges to an equilibrium of the game where firms only choose prices and produce to order-the associated Bertrand game (examples of which include fully asymmetric clearinghouse models). Thus, away from that limit, our work generalizes Bertrand-type equilibria to production in advance, and challenges the commonly held view associating production in advance with Cournot outcomes. The analysis involves, as an intermediate step, mapping the price-inventory game into an asymmetric all-pay contest with outside options and non-monotonic winning and losing functions. We apply our framework to public policy towards information sharing, mergers, cartels, and taxation.