Firm Scale and the Endogenous Timing of Entry: a Choice between Commitment and Flexibility

Sadanand, Asha; Sadanand, Venkatraman

doi:10.1006/jeth.1996.0102

Cited by 64 publications

(46 citation statements)

References 11 publications

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“…3 Thus, a kind of game-theoretic foundation of Forchheimer's dominant-firm model can be given by two-stage quantity-setting games. A similar result has been obtained by Sadanand and Sadanand (1996) in the presence of a sufficiently small but nonvanishing amount of demand uncertainty in a market with one large firm and a continuum of identical small firms. 4 In this respect, the present paper relaxes the assumptions of identical and infinitely many small firms.…”

Section: Introductionsupporting

confidence: 79%

“…Concerning the endogenous timing of moves, Sadanand and Sadanand (1996) mention in the proof of their Proposition 3 for the deterministic case that the large firm still could be the endogenous quantity leader in the market, but unfortunately this equilibrium outcome of the timing game does not remain unique. This paper adds to Sadanand and Sadanand by showing that nonvanishing demand uncertainty and a continuum of small firms play a crucial role in obtaining the large firm as the endogenous leader (Proposition 2).…”

Section: Introductionmentioning

confidence: 99%

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Quantity-setting games with a dominant firm

Tasnádi

2010

J. Econ.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Abstract:We consider a possible game-theoretic foundation of Forchheimer's model of dominant-firm price leadership based on quantity-setting games with one large firm and many small firms. If the large firm is the exogenously given first mover, we obtain Forchheimer's model. We also investigate whether the large firm can emerge as a first mover of a timing game.

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Section: Introductionsupporting

confidence: 79%

Section: Introductionmentioning

confidence: 99%

Quantity-setting games with a dominant firm

Tasnádi

2010

J. Econ.

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“…Hence, they conclude that a Stackelberg outcome will result but they cannot tell which one. Sadanand and Sadanand (1996) analyze the same model when rms face demand uncertainty, w h i c h i s r e s o l v ed before production in the second stage. (Also see Sadanand and Green (1991).)…”

Section: Introductionmentioning

confidence: 99%

“…Sadanand and Sadanand (1996) analyze the same model when rms face demand uncertainty, w h i c h i s r e s o l v ed before production in the second stage. (Also see Sadanand and Green (1991).) There is always a symmetric (Cournot) equilibrium: both rms move late when uncertainty is large and early when there is no uncertainty.…”

Section: Introductionmentioning

confidence: 99%

Endogenous Stackelberg Leadership

Damme

Hurkens

1999

Games and Economic Behavior

166

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We consider a linear quantity setting duopoly game and analyze which o f t h e players will commit when both players have the possibility t o d o s o . T o that end, we study a 2-stage game in which e a c h player can either commit to a quantity i n stage 1 or wait till stage 2. We s h o w that committing is more risky for the high cost rm and that, consequently, risk dominance considerations, as in Harsanyi and Selten (1988), allow the conclusion that only the low cost rm will choose to commit. Hence, the low cost rm will emerge as the endogenous Stackelberg leader.Hurkens gratefully acknowledges nancial support from EC grant ERBCHGCT 93-0462.

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“…Sadanand and Sadanand (1996) used in their analysis a partial equilibrium model containing a dominant firm and a nonatomic competitive fringe in order to investigate the timing of quantity-setting oligopoly games. Our model may be considered as the price-setting counterpart of their model.…”

Section: Introductionmentioning

confidence: 99%