|
EconStor >
Stockholm School of Economics >
EFI - The Economic Research Institute, Stockholm School of Economics >
SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/56242
|
| | |
| Title: | | Bertrand competition with intertemporal demand  |
| Authors: | | Dutta, Prajit Matros, Alexander Weibull, Jörgen W. |
| Issue Date: | | 2002 |
| Series/Report no.: | | SSE/EFI Working Paper Series in Economics and Finance 493 |
| Abstract: | | In the text-book model of dynamic Bertrand competition, competing firms meet the same demand function every period. This is not a satisfactory model of the demand side if consumers can make intertemporal substitution between periods. Each period then leaves some residual demand to future periods, and consumers who observe price under-cutting may correctly anticipate en ensuing price war and therefore postpone their purchases. Accordingly, the interaction between the firms no longer constitutes a repeated game, and hence falls outside the domain of the usual Folk theorems. We analyze collusive pricing in such situations, and study cases when consumers have perfect and imperfect foresight and varying degrees of patience. It turns out that collusion against patient and forward-looking consumers is easier to sustain than collusion in the text-book model. |
| Subjects: | | Bertrand competition Coase conjecture dynamic oligopoly stochastic games |
| JEL: | | C73 D43 D91 D92 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/56242
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|