Stephen Martin
Author information
Department of Economics, Purdue University, West Lafayette, IN 47906, USA
E-mail: smartin@purdue.edu
Kreps and Scheinkman (1983)’s celebrated result is that in a two-stage model of a market with homogeneous products in which firms noncooperatively pick capacities in the first stage and set prices in the second stage, the equilibrium outcome is that of a one-shot Cournot game. This note derives capacity best response functions for the first stage and extends the Kreps and Scheinkman result to the case of differentiated products.
Kreps and Scheinkman, capacity choice, Cournot, oligopoly, product differentiation
Stephen Martin. Kreps & Scheinkman with Product Differentiation. Front. Econ. China, 2019, 14(2): 203‒219 https://doi.org/10.3868/s060-008-019-0011-4