Viscous demand

• 成果类型: Article
• 署名作者: Radner, R
• 署名单位: New York University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/S0022-0531(03)00115-7
• 发表日期: 2003
• 页码: 189-231
• 关键词: viscous demand; Dynamic pricing; monopoly; duopoly; dynamic games

摘要

In many markets, demand adjusts slowly to changes in prices, i.e., demand is viscous. This viscosity gives each firm some monopoly power, since it can raise its price above that of its competitors without immediately losing all of its customers. The resulting equilibrium pricing behavior and market outcomes can differ significantly from what one would predict in the absence of demand viscosity. In particular, the model explains the importance of market share as an investment, as well as kinked demand curves. It also explains how apparently competitive pricing behavior can lead to outcomes that mimic those of collusion. (C) 2003 Elsevier Science (USA). All rights reserved.