Dynamic Price Competition with Price Adjustment Costs and Product Differentiation

  • Gianluigi Vernasca
  • Published 2003


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)


2 Figures and Tables