The authors model an oligopoly facing uncertain demand where each firm
chooses as its strategy a "supply function" relating its quantity to its
price. A supply function adapts better to an uncertain environment than
either a fixed price or a fixed quantity; it could be committed to through
the choice of organizational structure and employee decision rules. The
authors give conditions for existence and for uniqueness of a Nash
equilibrium in supply functions under uncertainty. They compare the
equilibrium with the Cournot and Bertrand equilibria as they vary the
demand and cost curves, the number of firms, and the form of uncertainty. Copyright 1989 by The Econometric Society.
