Dynamic Price Competition with Price Adjustment Costs and Product Differentiation

  • Gianluigi Vernasca
  • Published 2003

Abstract

We study a discrete time dynamic game of price competition with spatially di¤erentiated products and price adjustment costs. We characterise the Markov perfect and the open-loop equilibrium of our game. We ...nd that in the steady state Markov perfect equilibrium, given the presence of adjustment costs, equilibrium prices are always higher than prices at… (More)

Topics

2 Figures and Tables