Equilibrium and adjustments in noncompetitive markets: Lost sales versus backlogging processes

Abstract

This paper considers trading processes in which, periodically, price and output decisions are made before the realization of a random demand. A major achievement is to extend the scope of outcomes for the lost sales trading processes by demonstrating that the class of PF₂ density functions preserves uniqueness and regularity of behavior without imposing any linearity requirements. A second achievement is to verify that the backlogging full payment process and the lost sales process share common qualitative features with the major difference arising in the properties of the system equilibria.