Price-Setting Dynamical Duopoly with Incomplete Information

• Type: Article in International Conference Proceedings Book
• Date: 2011

Authors

Fernanda A. Ferreira (Author) Other; Flávio Ferreira (Author) Other; Alberto A. Pinto (Author) FCUP

Conference proceedings International

Title: Nonlinear Science and Complexity

Pages: 397-403

Indexing

ISI Web of Knowledge - 3 Citations

Scopus - 5 Citations

Scientific classification

FOS: Natural sciences > Mathematics

Other information

Authenticus ID: P-00A-9PZ

DOI: 10.1007/978-90-481-9884-9_46

Resumo (PT): We consider a price competition in a duopoly with substitutable goods, linear and symmetric demand. There is a firm (F 1) that chooses first the price p 1 of its good; the other firm (F 2) observes p 1 and then chooses the price p 2 of its good. The conclusions of this price-setting dynamical duopoly are substantially altered by the presence of either differentiated goods or asymmetric information about rival’s production costs. In this paper, we consider asymmetric information about rival’s production costs. We do ex-ante and ex-post analyses of firms’ profits and market prices. We compare the ex-ante firms’ expected profits with the ex-post firms’ profits.

Abstract (EN): We consider a price competition in a duopoly with substitutable goods, linear and symmetric demand. There is a firm (F-1) that chooses first the price p(1) of its good; the other firm (F-2) observes p(1) and then chooses the price p(2) of its good. The conclusions of this price-setting dynamical duopoly are substantially altered by the presence of either differentiated goods or asymmetric information about rival's production costs. In this paper, we consider asymmetric information about rival's production costs. We do ex-ante and ex-post analyses of firms' profits and market prices. We compare the ex-ante firms' expected profits with the ex-post firms' profits.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 7