Cournot Competition Under Yield Uncertainty: The Case of the US Influenza Vaccine Market

• 成果类型: Article
• 署名作者: Deo, Sarang; Corbett, Charles J.
• 署名单位: Northwestern University; University of California System; University of California Los Angeles
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.1080.0242
• 发表日期: 2009
• 页码: 563-576
• 关键词: Cournot competition; influenza vaccine; yield uncertainty; market structure

摘要

This paper is inspired by the recurring mismatch between demand and supply in the U. S. influenza vaccine market. Economic theory predicts that an oligopolistic market with unregulated but costly entry will experience excess entry and oversupply, not the undersupply observed in the market for influenza vaccine in recent years. In this paper, we examine the interaction between yield uncertainty, a key characteristic of many production processes, including that for influenza vaccine, and firms' strategic behavior. We find that yield uncertainty can contribute to a high degree of concentration in an industry and a reduction in the industry output and the expected consumer surplus in equilibrium. We use parameter values loosely based on the U. S. influenza vaccine market to numerically illustrate the impact of yield uncertainty.