Price Setting and Competition in a Simple Duopoly Model
AbstractThis paper studies a market in which there are two sellers and one buyer. Each agent wants to trade, at most, one unit of an indivisible commodity. The sellers are uncertain whether the buyer is receiving offers from one or both of them at any given time. This model induce s competitive and monopolistic outcomes for particular parameter values. But, other things being equal, as the buyer becomes very patient, the equilibrium price converges to the competitive one. Copyright 1988, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 103 (1988)
Issue (Month): 4 (November)
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- Gianni De Fraja & Jozsef Sakovics, 2004.
"Walras Retrouve: Decentralized Trading Mechanisms and the Competitive Price,"
ESE Discussion Papers
36, Edinburgh School of Economics, University of Edinburgh.
- Gianni De Fraja & Jozsef Sakovics, 2001. "Walras Retrouve: Decentralized Trading Mechanisms and the Competitive Price," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 842-863, August.
- Bester, H., 1991.
"Bargaining vs. price competition in a market with quality uncertainty,"
1991-13, Tilburg University, Center for Economic Research.
- Bester, H., 1991. "Bargaining V.S. Price Competition in a Market with Quality Uncertainty," Papers 9113, Tilburg - Center for Economic Research.
- Mitsutoshi M. Adachi, 1998. "A note on frictions in the Bazaar type bargaining game," Investigaciones Economicas, Fundación SEPI, vol. 22(2), pages 293-304, May.
- Timothy N. Cason & Shakun Datta, 2008. "Costly Buyer Search in Laboratory Markets with Seller Advertising," Purdue University Economics Working Papers 1212, Purdue University, Department of Economics.
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