Strategic incentives in dynamic duopoly

• 成果类型: Article
• 署名作者: Jun, B; Vives, X
• 署名单位: INSEAD Business School; Consejo Superior de Investigaciones Cientificas (CSIC); CSIC - Institut d'Analisi Economica (IAE); Korea University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2003.08.005
• 发表日期: 2004
• 页码: 249-281
• 关键词: differential game; adjustment costs; Markov equilibrium; Stackelberg

摘要

We compare steady states of open loop and locally stable Markov perfect equilibria (MPE) in a general symmetric differential game duopoly model with costs of adjustment. Strategic incentives at the MPE depend on whether an increase in the state variable of a firm hurts or helps the rival and on whether at the MPE there is intertemporal strategic substitutability or complementarity. A full characterization is provided in the linear-quadratic case. Then with price competition and costly production adjustment, static strategic complementarity turns into intertemporal strategic substitutability and the MPE steady-state outcome is more competitive than static Bertrand competition. (C) 2003 Elsevier Inc. All rights reserved.