Capacity constrained duopolies, uncertain demand and non-existence of pure strategy equilibria

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The paper analyses the effect of uncertainty in duopoly models where capacity constrained firms compete in prices. We show that no pure strategy Nash equilibrium exist in this game. If capacity is endogenous and chosen before prices, this result holds regardless of whether the realisation of demand is known to firms before or after they choose their prices.
Original languageEnglish
Pages (from-to)183-190
Number of pages8
JournalEuropean Journal of Political Economy
Issue number2
Publication statusPublished - Jul 1991

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