Семинары

Oligopolistic retailers sell an undifferentiated limited-lifetime product to strategic consumers. A manufacturer sets the first-period (full) price, while the second-period (clearance) price is determined by Cournot equilibrium. Symmetric pure-strategy equilibria may result in no sales in the first or second period (Cournot outcome versus collusion), and sales in both periods with the clearance price above or at the salvage value. Increasing strategic behavior can benefit retailers and hurt consumers, increasing competition may harm local economy, and strategic behavior may insure against oversupply. The welfare-optimal number of retailers can lead to the above-cost clearance price.