Title:
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Strategic inventories under limited commitment
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Author:
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Antoniou, Fabio; Fiocco, Raffaele
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Other authors:
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Universitat Rovira i Virgili. Departament d'Economia |
Abstract:
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In a dynamic storable good market where demand changes over time, we investigate the
producer's strategic incentives to hold inventories in response to the possibility of buyer
stockpiling. The literature on storable goods has demonstrated that buyer stockpiling in
anticipation of higher future prices harms the producer's profi tability, particularly when the
producer cannot commit to future prices. We show that the producer's inventories act as
a strategic device to mitigate the loss from the lack of commitment. Our results provide a
rationale for the producer's inventory behavior that sheds new light on the well-documented
empirical evidence about inventories.
Keywords: buyer stockpiling, commitment, storable goods, strategic inventories.
JEL Classifi cation: D21, D42, L12. |
Publication date:
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2017 |
Subject (UDC):
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338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus |
Subject(s):
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Conducta organitzacional Monopolis |
Rights:
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L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons: http://creativecommons.org/licenses/by-nc-nd/4.0/ |
Pages:
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35 p. |
Document type:
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Working Paper |
Published by:
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Universitat Rovira i Virgili. Centre de Recerca en Economia Industrial i Economia Pública
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Collection:
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Documents de treball del Departament d'Economia;2017-14
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