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| Pak-Sing Choi and Felix Munoz-Garcia |
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| ''Can more perishable products be welfare-improving?'' |
| ( 2023, Vol. 43 No.2 ) |
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| We examine how product perishability affects equilibrium behavior in the Stackelberg model, including firms' output decisions, profits, and welfare. We show that while both firms increase their production levels, aggregate sales decrease in equilibrium due to perishability. Welfare can, however, increase with more perishable products if firms are sufficiently cost symmetric. |
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| Keywords: Stackelberg competition, Perishability, Output advantage, First-mover's advantage, Welfare effects. |
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General |
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| Manuscript Received : Feb 15 2023 | | Manuscript Accepted : Jun 30 2023 |
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