scholarly journals Cost uncertainty in an oligopoly with endogenous entry

Author(s):  
Marco Pinto ◽  
Laszlo Goerke
2020 ◽  
Vol 14 (1) ◽  
Author(s):  
Guodaohou Song ◽  
Xiaofang Wang

AbstractProduction cost can be influenced by previous sales in an uncertain way. In reality, production cost may decrease in the number of initial buyers due to the learning effect, or increase in the number of initial buyers due to the quality-improving pressure from negative comments of unhappy users. Taking this uncertainty into account, this paper studies the optimal intertemporal pricing strategies of a firm when selling to strategic customers in two periods where production cost in the second period randomly changes with the number of buyers in the first period. Our results suggest how firms should adjust their optimal pricing strategies under different market circumstances.


1995 ◽  
Vol 7 (1) ◽  
pp. 57-73
Author(s):  
Benjamin F. Blair ◽  
Tracy R. Lewis ◽  
David E.M. Sappington

2003 ◽  
Vol 31 (3) ◽  
pp. 290-290
Author(s):  
Moawia Alghalith

2018 ◽  
Vol 108 (11) ◽  
pp. 3450-3491 ◽  
Author(s):  
Daron Acemoglu ◽  
Ufuk Akcigit ◽  
Harun Alp ◽  
Nicholas Bloom ◽  
William Kerr

We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using US Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4 percent improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents. Subsidies to the R&D of incumbents do not achieve this objective because they encourage the survival and expansion of low-type firms. (JEL D21, D24, H25, L52, O31, O34)


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