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General analysis of dynamic oligopoly with sticky price

Author

Listed:
  • Masahiko Hattori

    (Faculty of Economics, Doshisha University, Japan)

  • Yasuhito Tanaka

    (Faculty of Economics, Doshisha University, Japan)

Abstract

We present a differential game analysis of an oligopoly with sticky price under general demand and cost functions. We show that the output of each firm at the steady state of the open-loop dynamic oligopoly is generally larger than the output of each firm at the equilibrium of the static oligopoly, and the output of each firm at the steady state of the memoryless closed-loop dynamic oligopoly is generally larger than that at the steady state of the open-loop dynamic oligopoly. We also present an analysis of the feedback dynamic oligopoly.

Suggested Citation

  • Masahiko Hattori & Yasuhito Tanaka, 2019. "General analysis of dynamic oligopoly with sticky price," Economics Bulletin, AccessEcon, vol. 39(4), pages 2990-2998.
    • Handle: RePEc:ebl:ecbull:eb-19-00556
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2019/Volume39/EB-19-V39-I4-P277.pdf
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    References listed on IDEAS

    as
    1. Kenji Fujiwara, 2006. "A Stackelberg Game Model of Dynamic Duopolistic Competition with Sticky Prices," Economics Bulletin, AccessEcon, vol. 12(12), pages 1-9.
    2. R. Cellini & L. Lambertini, 2005. "R&D Incentives and Market Structure: Dynamic Analysis," Journal of Optimization Theory and Applications, Springer, vol. 126(1), pages 85-96, July.
    3. Roberto Cellini & Luca Lambertini, 2011. "R&D Incentives Under Bertrand Competition: A Differential Game," The Japanese Economic Review, Japanese Economic Association, vol. 62(3), pages 387-400, September.
    4. Fershtman, Chaim & Kamien, Morton I, 1987. "Dynamic Duopolistic Competition with Sticky Prices," Econometrica, Econometric Society, vol. 55(5), pages 1151-1164, September.
    5. Cellini, Roberto & Lambertini, Luca, 2007. "A differential oligopoly game with differentiated goods and sticky prices," European Journal of Operational Research, Elsevier, vol. 176(2), pages 1131-1144, January.
    6. Lambertini,Luca, 2018. "Differential Games in Industrial Economics," Cambridge Books, Cambridge University Press, number 9781316616499, January.
    7. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329.
    8. Fujiwara, Kenji, 2008. "Duopoly can be more anti-competitive than monopoly," Economics Letters, Elsevier, vol. 101(3), pages 217-219, December.
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    Cited by:

    1. Karbowski Adam & Prokop Jacek, 2020. "The Impact of Patents and R&D Cooperation on R&D Investments in a Differentiated Goods Industry," South East European Journal of Economics and Business, Sciendo, vol. 15(1), pages 122-133, June.

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    More about this item

    Keywords

    dynamic oligopoly; general demand function; general cost function; open-loop; closed-loop; feedback;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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