Myopic oligopoly pricing

• 成果类型: Article
• 署名作者: Bos, Iwan; Marini, Marco A.; Saulle, Riccardo D.
• 署名单位: Maastricht University; Sapienza University Rome; University of Padua
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2024.03.014
• 发表日期: 2024
• 页码: 377-412
• 关键词: Bounded rationality; Edgeworth price cycles; Myopic stable set; Oligopoly pricing; Supply shortages

摘要

This paper examines capacity-constrained oligopoly pricing with sellers who seek myopic improvements. We employ the Myopic Stable Set solution concept and establish the existence of a unique pure-strategy price solution for any given level of capacity. This solution is shown to coincide with the set of pure-strategy Nash equilibria when capacities are large or small. For an intermediate range of capacities, it predicts a price interval that includes the mixed-strategy support. This stability concept thus encompasses all Nash equilibria and offers a pure-strategy solution when there is none in Nash terms. It particularly provides a behavioral rationale for different pricing patterns, including Edgeworth price cycles and states of hyper-competition with supply shortages. We also analyze the impact of a change in firm size distribution. A merger among the biggest firms may lead to more price dispersion as it increases the maximum and decreases the minimum myopically stable price.