Strategic Price and Quantity Choices
Pp. 55-76 (22)
In this chapter, I present a systematic overview of the market outcomes for
classical oligopoly games. This study contains six games: pure quantity competition,
pure price competition as well as price and quantity competition, each with
simultaneous and sequential moves. I present equilibrium prices, quantities and profits
for each game. In particular, I present the mixed strategy equilibrium of the
simultaneous price and quantity competition. This equilibrium was found by Gertner
(1986), but remained unrecognized so far. From a comparison of market outcomes, I
can classify situations where the choice of decision variable(s) and timing gives
Decision variables, judo game, mixed strategy equilibrium, price,
quantity, oligopoly competition, price leadership games, price-quantity game,
simultaneous move games, sequential move games.
University of Magdeburg, Faculty of Economics and Management, Universitaetsplatz 2, 39106 Magdeburg, Germany.