Dynamic price competition
AbstractWe consider the model of price competition for a single buyer among many sellers in a dynamic environment. The surplus from each trade is allowed to depend on the path of previous purchases, and as a result, the model captures phenomena such as learning by doing and habit formation in consumption characterize Markovian equilibria for finite and infinite horizon versions of the model and show that the stationary infinite horizon version of the model possesses an equilibrium where all the sellers receive an equilibrium payoff equal to their marginal contribution to the social welfare.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 127 (2006)
Issue (Month): 1 (March)
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Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Dirk Bergemann & Juuso Valimaki, 2004. "Dynamic Price Competition," Yale School of Management Working Papers ysm360, Yale School of Management.
- Dirk Bergemann & Juuso Valimaki, 2003. "Dynamic Price Competition," Cowles Foundation Discussion Papers 1412, Cowles Foundation for Research in Economics, Yale University.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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