We're Number 1: Price Wars for Market Share Leadership

• 成果类型: Article
• 署名作者: Cabral, Luis
• 署名单位: New York University; Centre for Economic Policy Research - UK
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2725
• 发表日期: 2018
• 页码: 2013-2030
• 关键词: dynamic oligopoly; price wars; Market shares; ordinal rankings

摘要

I examine the dynamics of oligopolies when firms derive subjective value from market leadership. In equilibrium, prices alternate in tandem between high levels and occasional price wars, which take place when market leadership is at stake. The stationary distribution of market shares is typically multimodal; that is, much of the time, there is a stable market leader. Even though shareholders do not value market leadership per se, a corporate culture that values market leadership may increase shareholder value.