Amparo Urbano (Universitat de València) María Dolores Alepuz Domenech (Universitat de València)
Abstract
This paper analyzes how leaming behaviour can modify the outcome of competition in an industry facing demand uncertainty. We consider a duopoly game where firms have imperfect information about market demand and leam through observing prices (Coumot competition) or sales (Bertrand) . The main body of the paper consists in showing how duopoly experimentation is affected by the type of market competition. We find that, if the goods are substitutes, firms will experiment more under Bertrand than under Coumot. If the goods are complements, the result is reversed. Furthermore, there is less experimentation under Coumot with product substitution.
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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number
1991-07.
Length: 55 pages Date of creation: Jan 1991 Date of revision: Publication status: Published by Ivie Handle: RePEc:ivi:wpasad:1991-07
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Luis Corchón & Bhaskar Chakravorti & Simon Wilkie, 1993.
"Credible Implementation,"
Working Papers. Serie AD
1993-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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Chakravorti, B. & Corchon, L.C., 1992.
"Credible Implementation,"
Papers
76, Bell Communications - Economic Research Group.
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