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Simultaneous Capacity Moves
Sequential Capacity Moves
4 other sections not shown
according to Lemma capacities simultaneously capacity cost capacity expansion capacity moves game capacity planner choices of firms choose its capacity competitor corner solution Corollary 4.1 demand is low demand uncertainty duopoly equation 4.2 Equilibrium Capacity Choices equilibrium excess capacity expected excess capacity Firm 2 reacts firm fs firm l's capacity firm l's type firms choose firms observe follows function of firm industry capacity industry excess capacity infeasible interior solution l's capacity choice leader long run effects low demand market demand maximization moderately optimistic mover advantage Nash equilibrium observes a signal off-equilibrium beliefs order condition perfect Bayesian equilibrium polysilicon industry pooling quantity price game prior probability private signal probability of low producer's surplus producers surplus profit function Proof of Lemma Proposition 4.1 Region A2 Region B2.2 Region ml response function reveal the demand separating equilibrium SEQ1 SEQ2 sequential game sequential moves game simultaneous and sequential strategy Table