Firms' strategic choices under demand uncertainty
Beckert, Walter (2002) Firms' strategic choices under demand uncertainty. Working Paper. Birkbeck, University of London, London, UK.
Abstract
This paper investigates how firms choose prices and production capacity when facing stochastic demand. With demand uncertainty, firms face demand curves for their goods which implicitly subsume the selling mechanism adopted in the markets for these goods. The selling mechanisms considered in this analysis are bidding markets or auctions, and take-it-or-leave-it sales. They have different implications for the respective expected demand curves the firms face, and hence for the firms' capacity choices. These implications entail consequences for welfare. It is shown that auctions yield higher expected comsumer welfare than take-it-orleave-it sales when production costs are high, while take-it-or-leave-it sales enhance welfare when production costs are low
Metadata
| Item Type: | Monograph (Working Paper) |
|---|---|
| School: | Birkbeck Faculties and Schools > Faculty of Science > School of Computing and Mathematical Sciences |
| Depositing User: | Sarah Hall |
| Date Deposited: | 02 Jun 2020 08:46 |
| Last Modified: | 09 Aug 2023 12:48 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/32103 |
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