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Cournot duopoly with two production periods
Institution:1. Department of Mathematics, University of Connecticut, Storrs, CT, USA;2. Department of Mathematics, University of Connecticut—Waterbury, Waterbury, CT, USA;1. Land Economy Environment and Society, Scotland’s Rural College (SRUC), King’s Buildings, West Mains Road, Edinburgh EH9 3JG, United Kingdom;2. Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, AR 7270, United States;3. Department of Food and Resource Economics, Korea University, Seoul, South Korea;4. Norwegian Agricultural Economics Research Institute, Oslo, Norway;5. CREDA-UPC-IRTA, Parc Mediterrani de la Tecnologia, Edifici ESAB, C/Esteve Terrades, 8, 08860 Castelldefels, Spain;1. Université catholique de Louvain, Belgium;2. Ariel University and Emek Yezreel Academic College, Israel;1. Shandong University, China;2. National University of Singapore, Department of Economics, 1 Arts Link, Singapore, 117570, Singapore
Abstract:We modify the Cournot model by allowing for two production periods before the market clears. The firms choose outputs simultaneously in the first period. These outputs become common knowledge and then the firms choose how much more to produce in the second period before the market clears. Any outcome on the outer envelope of the best-response functions between and including the firms' smallest Stackelberg outcomes is sustainable as a subgame perfect Nash equilibrium.
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