Damme, Eric van; Hurkens, Sjaak. Endogenous Price Leadership. 2005
http://hdl.handle.net/10230/608
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Title:
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Endogenous Price Leadership |
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Author:
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Damme, Eric van; Hurkens, Sjaak
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Other authors:
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Universitat Pompeu Fabra. Departament d'Economia i Empresa
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Abstract:
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We consider a linear price setting duopoly game with differentiated products and determine endogenously which of the players will lead and which will follow. While the follower role is most attractive for each firm, we show that waiting is more risky for the low cost firm so that, consequently, risk dominance considerations, as in Harsanyi and Selten (1988), allow the conclusion that only the high cost firm will choose to wait. Hence, the low cost firm will emerge as the endogenous price leader.
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Document type:
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Working paper
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Date:
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2005 |
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Rights:
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Aquest document està subjecte a una llicència d'ús de Creative Commons, amb la qual es permet copiar, distribuir i comunicar públicament l'obra sempre que se'n citin l'autor original, la universitat i el departament i no se'n faci cap ús comercial ni obra derivada, tal com queda estipulat en la llicència d'ús (http://creativecommons.org/licenses/by-nc-nd/2.5/es/)
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