Dynamic duopoly with congestion effects

被引:20
作者
Laussel, D [1 ]
de Montmarin, M [1 ]
Van Long, N [1 ]
机构
[1] McGill Univ, Dept Econ, Montreal, PQ H3A 2T7, Canada
关键词
oligopoly; differential games; Markov perfect equilibrium;
D O I
10.1016/j.ijindorg.2004.02.001
中图分类号
F [经济];
学科分类号
02 ;
摘要
We analyze duopolistic competition between horizontally differentiated firms selling durable goods or services subject to congestion. At each point of time, new customers buy one unit of the commodity from one of the firms, by comparing present prices and future congestion rates. We study the linear Markov equilibrium of this game which exists and is unique when firms are not too different. The existence of negative consumption externalities is shown to soften the price competition. Moreover, we show that the firm with the larger capacity has, at the steady state, a larger market share, a higher price, and a lower congestion rate. The price of an entrant decreases gradually after entry, while the price of the incumbent rises. The faster the speed of convergence to the steady state is, the stronger is the congestion effect. (C) 2004 Elsevier B.V. All rights reserved.
引用
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页码:655 / 677
页数:23
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