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Cost of Delay, Deadlines and Endogenous Price Leadership

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  • Pastine, Ivan
  • Pastine, Tuvana

Abstract

This Paper analyses endogenous price leadership in a duopolistic market with differentiated products and symmetrically informed firms. We study the effects of deadlines and discounting in a standard endogenous leadership model. We show that there will be occasional changes in the identity of the price leader with any cost of delay or discounting, however small. By analyzing the incentives that induce a firm to take up the leader position we derive positive predictions about which firm will lead most price changes.

Suggested Citation

  • Pastine, Ivan & Pastine, Tuvana, 2001. "Cost of Delay, Deadlines and Endogenous Price Leadership," CEPR Discussion Papers 3054, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3054
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    References listed on IDEAS

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    More about this item

    Keywords

    endogenous timing; price leadership; war of attrition;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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