Skip to main content
padlock icon - secure page this page is secure

Competition for scarce resources

Buy Article:

$59.00 + tax (Refund Policy)

We model a downstream industry where firms compete to buy capacity in an upstream market which allocates capacity efficiently. Although downstream firms have symmetric production technologies, we show that industry structure is symmetric only if capacity is sufficiently scarce. Otherwise it is asymmetric, with one large, “fat,” capacity-hoarding firm and a fringe of smaller, “lean,” capacity-constrained firms. As demand varies, the industry switches between symmetric and asymmetric phases, generating predictions for firm size and costs across the business cycle. Surprisingly, increasing available capacity can cause a reduction in output and consumer surplus by resulting in such a switch.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Document Type: Research Article

Affiliations: 1: University of Oxford;, Email: [email protected] 2: University of Mannheim, CESifo, and CEPR;, Email: [email protected] 3: Harvard University and CEPR;, Email: [email protected]

Publication date: September 1, 2010

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more