Seminar Series

2021 - 2022

Speaker: Sebastien Mitraille (TBS).

Title: “Advance Sales and Deterrence with Heterogeneous Firms”

joint with Henry Thille (U of Guelph, Ontario).

Date: Thursday, January 13th at 12h30 (Paris Time).

Abstract: We examine the effects of firm heterogeneity when firms can compete in advance for

future demand by either entering forward contracts or by selling to agents that store the

good to meet future demand. Compared to the homogeneous firm case, allowing for differing marginal costs of production leads to an additional type of equilibrium: lower-cost firms

might act to deter the activity of higher-cost firms. In this case, the presence of inactive

higher-cost firms in the market results in a lower price than would otherwise obtain. In

addition, the advance sales equilibrium with heterogeneous firms has higher market shares

for relatively efficient firms compared to that in both the heterogeneous firm Cournot equilibrium and the homogeneous firm advance sales equilibrium. Consequently, the equilibrium

outcome results in industry output produced at a lower average cost, which represents an

additional welfare gain associated with the pro-competitive effects of strategic advance sales

even though the reallocation of market shares leads to higher measured concentration.

You will find the paper attached.

You are cordially invited to participate to the seminar, which will take place in Room 327, Lascrosses building, if the sanitary situation permits it.

For those who will not be in the room, please find the zoom link below:

https://tbs-education-fr.zoom.us/j/89263678297?pwd=Nmc0UEZiYTNmSUJrOVR6U1FsbzQydz09

Meeting ID: 892 6367 8297

Passcode: 968200

If the sanitary situation does not permit the seminar to take place in presence, it will take place online and you will receive a mail announcing it beforehand.

For more information, please contact: Pierre Mella-Barral p.mella-barral@tbs-education.fr