Paper #581
- Título:
- Endogenous price leadership
- Autores:
- Eric van Damme y Sjaak Hurkens
- Data:
- Noviembre 2001
- Resumen:
- We consider a linear price setting duopoly game with diŽerentiated products and determine endogenously which of the players will lead and which will follow. While the follower role is most attractive for each firm, we show that waiting is more risky for the low cost firm so that, consequently, risk dominance considerations, as in Harsanyi and Selten (1988), allow the conclusion that only the high cost firm will choose to wait. Hence, the low cost firm will emerge as the endogenous price leader.
- Palabras clave:
- Price leadership, endogenous timing, risk dominance
- Códigos JEL:
- C72, D43
- Área de investigación:
- Microeconomía
- Publicado en:
- Games and Economic Behavior 47, 404-20, 2004
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