Optimal dynamics of technology and price in a duopoly market
This article examines a case where the demand of a new product follows an applied diffusion model influenced by innovation and price differential effects, and the potential market size expands as the technology level embodied in the product advances. For a duopoly, we set up a differential game model and derived open-loop Nash equilibrium solutions, showing that the optimal dynamics between the competitors' technology and price levels depend on the relative magnitude of innovation and price differential coefficients. If the price differential coefficients of the two competitors are symmetrical, the optimal prices become constant and in general the technology levels increase.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 19 (2012)
Issue (Month): 11 (July)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEL20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEL20|
When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:19:y:2012:i:11:p:1017-1022. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.