Identifying Reaction Functions in a Differential Oligopoly Game with Sticky Prices
We investigate the issue of strategic substitutability/complementarity in a Cournot differential game with sticky prices. We show that first order conditions do not produce instantaneous best reply functions. However, we identify negatively sloped reaction functions in steady state, with the open-loop best reply being flatter than its closed-loop counterpart.
|Date of creation:||2004|
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