Endogenous Timing of Moves in Bertrand-Edgeworth Triopolies

We determine the endogenous order of moves in which the firms set their prices in the framework of a capacity-constrained Bertrand-Edgeworth triopoly. A three-period timing game that determines the period in which the firms announce their prices precedes the price-setting stage. We show for the non-trivial case (in which the Bertrand-Edgeworth triopoly has only an equilibrium in non-degenerated mixed-strategies) that the firm with the largest capacity sets its price first, while the two other firms set their prices later. Our result extends a finding by Deneckere and Kovenock (1992) from duopolies to triopolies. This extension was made possible by Hirata's (2009) recent advancements on the mixed-strategy equilibria of Bertrand-Edgeworth games.

Do institutions matter in business strategy? – The changing focus of strategic management to institutions: a literature review

The post-crisis managerial literature emphasizes the roles of institutional factors in any disruption of the ecosystem of market capitalism and puts it in the middle of its analytical framework. It has become clear that nowadays, scientific discussions about the measure of increase of direct state involvement in certain economic areas has become more relevant. The socio-economic model based on market coordination was no doubt shaken by the crisis in 2008 across the world and inspired various representatives of the scientific and political community to revise their theses on coordination mechanisms that support the way out of an economic downturn. This paper intends to give a brief summary of the two leading strategic management approaches (Porter’s five forces and the resource-based view of the firm) on institutions. The author’s aim is to demonstrate that incorporation of the institution-based view into the mainstream theories can enrich the analytical framework of strategic management by providing deeper understanding of the contextual factors that underpin interactions between institutions and organizations.