Authors: Kazuhiro Ohnishi
This paper considers a two-period international mixed duopoly model in which a domestic state-owned welfare-maximizing public firm and a foreign profit-maximizing private firm are allowed to hold inventories as a strategic device. In the first period, each firm simultaneously and independently chooses how much it sells in the current market and the level of inventory it holds for the second-period market. By holding inventory, a firm can change the competitive environment in the second period. The paper demonstrates that inventories are used by the domestic state-owned public firm to achieve a collusive outcome.
Comments: 19 Pages. Published in The Hellenic Open Business Administration Journal; https://hobajournal.wordpress.com/
[v1] 2018-07-01 03:36:43
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