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In a capacity-then-price-setting game we experimentally identify capacity precommitment, the possibility to communicate before price choices, and prior competition experience as crucial factors for collusive pricing. The theoretical analysis determines the capacity thresholds above which firms...
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than its static analog. We then test the theory using monthly production targets of the Big Three U.S. auto manufacturers …
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than its static analog. We then test the theory using monthly production targets of the Big Three U.S. auto manufacturers …
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same market faced with the uncertain demand. The manufacturers can either participate in the supplier development programme … by reserving their capacities from the supplier before the demand is realized, which is referred to as the advance … reservation, or do not by reserving their capacities after the demand is realized, which is referred to as the regular reservation …
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