Elastic demand, sunk costs and the Kreps-Scheinkman extension of the Cournot model

The paper shows that, with any rationing mechanism between the efficient and proportional extremes, the Kreps-Scheinkman two-stage quantity-price game reduces to the Cournot model if demand is uniformly elastic and if all costs are sunk at the first stage, thus providing positive results to set against existing negative statements.

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Year of publication:	1998-06-16
Authors:	Madden, Paul
Published in:	Economic Theory. - Springer. - Vol. 12.1998, 1, p. 199-212
Publisher:	Springer

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Extent:	application/pdf application/postscript
Type of publication:	Article
Notes:	Received: May 24, 1995; revised version: March 6, 1997
Classification:	C72 - Noncooperative Games ; D43 - Oligopoly and Other Forms of Market Imperfection ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005371072