Differential Oligopoly Games where the Closed-Loop Memoryless and Open-Loop Equilibria Coincide
We illustrate two differential oligopoly games using, respectively, the capital accumulation dynamics à la Nerlove-Arrow, and the capital accumulation dynamics à la Ramsey. We prove that these games benefit from the property that closed-loop memoryless solutions degenerate into open-loop solutions, since the best reply of a generic firm is independent of the rivals’ state variables, which entails that the cross e¤ect from rivals’ states to own controls disappears.
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- Driskill, Robert A. & McCafferty, Stephen, 1989. "Dynamic duopoly with adjustment costs: A differential game approach," Journal of Economic Theory, Elsevier, vol. 49(2), pages 324-338, December.
- Cellini, Roberto & Lambertini, Luca, 1998. "A Dynamic Model of Differentiated Oligopoly with Capital Accumulation," Journal of Economic Theory, Elsevier, vol. 83(1), pages 145-155, November.
- M. Baldini & L. Lambertini, 2002. "Profit Taxation and Capital Accumulation in Dynamic Oligopoly Models," Working Papers 435, Dipartimento Scienze Economiche, Universita' di Bologna.
- R. Cellini & L. Lambertini, 2000. "Non-Linear Market Demand and Capital Accumulation in A Differential Oligopoly Game," Working Papers 372, Dipartimento Scienze Economiche, Universita' di Bologna.
- Dockner, Engelbert J. & Haug, Alfred A., 1990. "Tariffs and quotas under dynamic duopolistic competition," Journal of International Economics, Elsevier, vol. 29(1-2), pages 147-159, August.
- Fershtman, Chaim & Kamien, Morton I, 1987. "Dynamic Duopolistic Competition with Sticky Prices," Econometrica, Econometric Society, vol. 55(5), pages 1151-1164, September.
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