Firms often must procure inventory/capacity before knowing what the demand will be, so there is a potential for a mismatch between inventory and demand, the “inventory risk.” We show that, because of inventory risk, an increase in the number of competitors can lead to an increasing trend in market prices. Furthermore, we show that, ceteris paribus, because of how inventory risk impacts competitive behavior, firms may prefer to incur inventory risk rather than to avoid it. To illustrate the robustness of our results, we establish these findings using three complementary methodologies: (i) using data from a classroom experiment, (ii) using a quantal response equilibrium simulation to capture realistic irrationalities in managerial decisions under competition, and (iii) using a fully rational Nash equilibrium model to capture the impact of the competition per se. That all three methods lead to identical qualitative findings reinforces the main message of our paper: Inventory risk reverses the standard intuition for how an increase in the number of competitors impacts prices.

中文翻译：

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竞争条件下存货风险对市场价格的影响

公司通常必须在了解需求之前采购库存/产能，因此存在库存与需求不匹配的可能性，即“库存风险”。我们表明，由于库存风险，竞争对手数量的增加会导致市场价格呈上升趋势。此外，我们表明，在其他条件不变的情况下，由于库存风险如何影响竞争行为，公司可能更愿意承担库存风险而不是避免它。为了说明我们结果的稳健性，我们使用三种互补的方法建立这些发现：（i）使用来自课堂实验的数据，（ii）使用量子响应平衡模拟来捕捉竞争下管理决策中的现实非理性，(iii) 使用完全理性的纳什均衡模型来捕捉竞争本身的影响。这三种方法都得出相同的定性结果，这强化了我们论文的主要信息：库存风险逆转了竞争者数量增加如何影响价格的标准直觉。