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Bonn Graduate School of Economics (BGSE), Universität Bonn >
Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/37019
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Full metadata record
| DC Field | | Value | | Language |
| dc.contributor.author | | Matzke, Christina | | en_US |
| dc.contributor.author | | Wirth, Benedikt | | en_US |
| dc.date.accessioned | | 2009-06-30 | | en_US |
| dc.date.accessioned | | 2010-07-29T10:08:09Z | | - |
| dc.date.available | | 2010-07-29T10:08:09Z | | - |
| dc.date.issued | | 2009 | | en_US |
| dc.identifier.uri | | http://hdl.handle.net/10419/37019 | | - |
| dc.description.abstract | | We analyze the strategic behavior of firms when demand is determined by a rule of thumb behavior of consumers. We assume consumer dynamics where individual consumers follow simple behavioral decision rules governed by imitation and habit as suggested in consumer research. On this basis, we investigate monopoly and competition between firms, described via an open loop differential game which in this setting is equivalent to but analytically more convenient than a closed-loop system. We derive a Nash equilibrium and examine the influence of advertising. We show for the monopoly case that a reduction of the space of all price paths in time to the space of time-constant prices is sensible since the latter in general contains Nash equilibria. We prove that the equilibrium price of the weakest active firm tends to marginal cost as the number of (non-identical) firms grows. Our model is consistent with observed market behavior such as product life cycles. | | en_US |
| dc.language.iso | | eng | | en_US |
| dc.publisher | | Graduate School of Economics Bonn | | en_US |
| dc.relation.ispartofseries | | Bonn econ discussion papers 2009,3 | | en_US |
| dc.subject.jel | | C61 | | en_US |
| dc.subject.jel | | C62 | | en_US |
| dc.subject.jel | | C79 | | en_US |
| dc.subject.jel | | L11 | | en_US |
| dc.subject.jel | | L21 | | en_US |
| dc.subject.jel | | M31 | | en_US |
| dc.subject.jel | | M37 | | en_US |
| dc.subject.ddc | | 330 | | en_US |
| dc.subject.keyword | | Bounded rationality | | en_US |
| dc.subject.keyword | | social learning | | en_US |
| dc.subject.keyword | | population game | | en_US |
| dc.subject.keyword | | differential game | | en_US |
| dc.subject.keyword | | product life cycle | | en_US |
| dc.subject.keyword | | monopoly | | en_US |
| dc.subject.keyword | | competition | | en_US |
| dc.subject.keyword | | pricing | | en_US |
| dc.subject.keyword | | advertising | | en_US |
| dc.subject.stw | | Preistheorie | | en_US |
| dc.subject.stw | | Marktstruktur | | en_US |
| dc.subject.stw | | Wettbewerb | | en_US |
| dc.subject.stw | | Betriebliche Preispolitik | | en_US |
| dc.subject.stw | | Werbung | | en_US |
| dc.subject.stw | | Spieltheorie | | en_US |
| dc.subject.stw | | Produktlebenszyklus | | en_US |
| dc.subject.stw | | Konsumtheorie | | en_US |
| dc.subject.stw | | Beschränkte Rationalität | | en_US |
| dc.subject.stw | | Lernprozess | | en_US |
| dc.subject.stw | | Theorie | | en_US |
| dc.title | | Product pricing when demand follows a rule of thumb | | en_US |
| dc.type | | Working Paper | | en_US |
| dc.identifier.ppn | | 603371086 | | en_US |
| dc.rights | | http://www.econstor.eu/dspace/Nutzungsbedingungen | | - |
| Appears in Collections: | | Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn
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