DYNAMIC OLIGOPOLY WITH STICKY PRICES: CLOSED-LOOP, FEEDBACK, AND OPEN-LOOP SOLUTIONS

    loading  Checking for direct PDF access through Ovid

Abstract

ABSTRACT

We investigate a dynamic oligopoly game with price adjustments. We show that the subgame perfect equilibria are characterized by larger output and lower price levels than the open-loop solution. The individual (and industry) output at the closed-loop equilibrium is larger than its counterpart at the feedback equilibrium. Therefore, firms prefer the open-loop equilibrium to the feedback equilibrium, and the latter to the closed-loop equilibrium. The opposite applies to consumers.

Related Topics

    loading  Loading Related Articles