Anton, James J.; Biglaiser, Gary; Vettas, Nikolaos - In: International Economic Review 55 (2014) 08, pp. 943-958
We analyze a simple dynamic durable good model. Two incumbent sellers and potential entrants choose their capacities at the start of the game. We solve for equilibrium capacity choices and the (necessarily mixed) pricing strategies. In equilibrium, the buyer splits the order with positive...